The shocking scope of the benefits Rachel Reeves need to balance the books can be seen that the disabled and long -term sick are lost as much as £ 1,200 a year, a leading thinking tank warned.
The analysis of the respected Institute for Fiscal Studies comes because Liz Kendall, secretary of work and pensions, will reveal plans to reduce benefits by around £ 5 billion.
The government has already indicated that it will focus on the welfare blessers of the working age, especially those demanding disability and payments for the welfare of disability, with the fear that the annual account for these benefits will be £ 70 billion by 2030.
The concern is because the Organization for Economic Cooperation and Development (OECD) has downgraded the UK’s already low growth forecasts in the aftermath of the impact of Donald Trump’s rates around the world.
The government insisted that its hand be not forced to cut benefits to balance the books, as Ms Reeves met with regulators to hear their ideas about promoting growth.
But IFS director Paul Johnson warned that Ms Reeves had “no room for maneuver” next week, which is already called “an emergency budget”.
According to the IFS, this target will mean a 16 percent potential cut for claimants.
It noted: ‘Suppose they looked like £ 5bn – a widely cited number – from disability benefits alone at the end of Parliament. To do this completely through cutting benefit values, a cut of 16 percent real terms would be needed-average £ 1.150 per year for the 4.3 million people expected to be on them by 2029. “
It added: “A 16 percent cut in the value of disability benefits – £ 1,200 averaging a year of 4.1 million people – would save £ 5 billion.
‘In order to bring about that saving through the cupboard, it would be necessary to stop it almost entirely. This would be a major break from post-pandemic tendencies (although not pre-pandemics). “
While the government indicated over the weekend that it would abandon plans to freeze personal independence payments (PIPs) to anger from within labor, the policy of reducing the benefits account is continued.
In particular, ministers are upset that 2.8 million adults of the working age are out of work and disability benefits. The number will rise to 4 million by 2030, which costs the taxpayer £ 70 billion a year.
Under the new plans, Ms. Kendall is expected to announce more control over disease benefits, The times reported. This is likely to include a proposal to get rid of the assessment of the work ability in the middle of the disability benefit system.
She is then ready to reduce the highest rate of universal credit capacity benefit in an attempt to end “inactivity” incentives, although the basic rate will rise.
Ms. Kendall is expected to make it more difficult for people with everyone except the most serious disabilities to claim personal independence payments (PIP), the most important disability benefit. They will have to demonstrate that they have greater problems with everyday activities such as wax, eating and dressing.
Mr. Johnson warned that the good news for Ms Reeves is that things can’t get worse.
He told Times Radio: ‘This is a funny kind of good news … in the sense that things are in some ways so bad that hopefully they can only get better.
“The chancellor did not find any room for maneuver in terms of money to spend in the spring statement or prediction or budget, or what we get within ten days.”
He noted that the UK spent about £ 20bn more on disability and disability benefits than it did five years ago.
He said: “We spend so much money on disability and disability benefits that there must surely be a way to cut it. Our public services are so ineffective and their productivity has collapsed so much that if it can be made to get better. “
He added: ‘But the fiscal numbers, the budget numbers, are of course based on the assumption that things are basically as bad as they were. So if they can get a little better there, there may be a little more room for maneuver. ‘
But the Center for Social Justice (CSJ), the thinking tank that came up with many of the ideas for the previous major welfare reform, supported the government’s approach.
Ed Davies, director of the CSJ policy, said: “Too many people are written off. Although cutting benefits would be difficult and can risk a civil war within the Labor Party, the condition can be extended more widely by the system, especially as the benefits of the disease are rolled up in universal credit.
“Liz Kendall can change those exempt from conditions and are subject to no work -related requirements. I am delighted to see that the government is adopting the CSJ’s recommendation for a ‘work guarantee’, which will give claimants the confidence of trying to work without any risk for their benefits.
“We estimate that it will free 700,000 people who say they want to work to go to work, and save £ 10bn to benefits payments and generate £ 3.3bn in tax receipts, a total of £ 13.3 billion back to the taxpayer.”
Meanwhile, the government of Sir Keir Starmer stares a possible setback in the labor in the plan to cut disability and long-term disease benefits. With the rates of Donald Trump striking global trade, the OECD predicted that there would be a global slowdown of economic growth.
The British growth estimates fell to 1.4 percent in 2025 and 1.2 percent in 2026, lower than already low levels of 1.7 percent and 1.3 percent of its previous forecasts respectively.
The OECD said worldwide that the growth of 3.2 percent in 2024 to 3.1 percent in 2025 and 3 percent in 2026 would slow down, lower than 3.3 percent previously for both years, largely due to the tensions of the new US president.
Although the UK has avoided hard fines so far, it has been caught by the past week’s 25 percent rates on steel and aluminum entering America.
In addition, the 10 percent tariff that Trump placed on Chinese imports in February doubled to 20 percent.
Countries were rapidly retiring and financial markets were sent last week over the fear that the measures could cause a recession in the US.
Ms Reeves said the report shows that the ‘world is changing, and that a larger global winds such as trade uncertainty are generally felt’.
The chancellor met with regulators on Monday to discuss ways to cut red tape to increase growth in an effort to start the economy.
She added: “A changing world means that Britain also has to change, and we deliver a new era of stability, safety and renewal to protect working people and keep our country safe.”
The chancellor said it would mean that Britain could “respond better to global uncertainty”.
But the Liberal Democrats said that the economic policy of labor “acts as an anchor on any meaningful growth” and asks Ms Reeves to change course “.
