Rachel Reeves has unveiled controversial plans to slash Britain’s soaring welfare bill, forcing more disability benefit claimants into work.

In what has been described as the most severe cuts to disability payments in history, the Chancellor has confirmed a £4.8 billion crackdown in its today’s Spring Budget.

The reforms will see a reduction in the health element of Universal Credit for new claimants.

The proposals have sparked outrage among campaigners, charities, and Labour MPs, who warn they will have devastating consequences for Britain’s most vulnerable. 

A record 2.8 million people are currently out of work due to long-term illness, and spending on disability and incapacity benefits has soared by £19 billion in real terms since 2019-2020.

Government ministers claim the number of working-age people signed off sick is “indefensible and unfair” to taxpayers. But critics argue that Labour’s cuts are a betrayal of the very people the party once pledged to protect—warning they could push thousands deeper into poverty.

The government’s welfare cuts will hit more than 3m people, it has emerged following the Spring Statement from Rachel Reeves.

Awards under the PIP – Personal Independence Payments – will be reduced for some 800,000 claimants with the average loss put at £4,500.

Universal Credit shake-up: Increases as well as brutal cuts

Universal Credit Standard Allowance to rise – from £92 per week in 2025-26 to £106 per week by 2029-30.

Health Element of Universal Credit slashed – cut by 50% for new claimants and then frozen.

Campaigners warn this will push thousands into financial hardship, with the sick and disabled hit hardest.

Tougher rules for Personal Independence Payments (PIP)

New rules will make it harder for people to qualify for PIP, the key disability benefit. Claimants must score at least four points on a single daily living activity to receive support. These activities include preparing food, managing a health condition, washing, dressing, communicating, and budgeting.

Anyone scoring three points or fewer on each activity will lose their entitlement, a move expected to strip support from thousands. This new threshold comes on top of existing PIP eligibility criteria. However, the mobility element of PIP will not be affected.

Notably, previous Conservative proposals to replace PIP with vouchers or means-testing have been scrapped.

Reprieve for those with severe disabilities

People with the most severe, lifelong disabilities will no longer face repeated benefit reassessments. Their incomes will also be protected.

However, face-to-face disability assessments will increase dramatically, with the proportion of in-person PIP and Work Capability Assessments (WCA) set to rise from the current 7%. Ministers claim this will build “trust” in the system, but campaigners fear it could lead to more vulnerable claimants being wrongly denied support.

Work Capability Assessment (WCA) scrapped

Labour will abolish the WCA, replacing it with the PIP assessment to determine entitlement for the health element of Universal Credit. Unlike the current system, eligibility will be based on the impact of disability on daily living—not capacity to work.

The government says this will reduce the number of assessments by merging two into one. Currently, 1.7 million people undergo both assessments. But critics warn it could see many miss out on crucial support.

‘Right to Try’ work without losing benefits

In a bid to encourage disabled people into employment, Labour says benefits will no longer be reassessed or removed just because someone tries working. This measure, set to be enshrined in law, aims to “give disabled people confidence” to enter work without fear of losing support if it doesn’t work out.

Claimants receiving the health element of Universal Credit will still have a work allowance, allowing them to earn:

Up to £404 a month before benefits are affected (if receiving housing support).

Up to £673 a month if they don’t receive housing support.

Statement from the Chancellor

The Chancellor said too many people are not working and “it is a waste of their potential”

Ms Reeves told MPs: “Today, the OBR have said that they estimate the package will save £4.8bn in the welfare budget reflecting their judgements on behavioural effects and wider factors.

“This also reflects final adjustments to the overall package, consistent with the Secretary of State’s statement last week, and the Government’s Pathways to Work Green Paper.”