Summary of events
MPs voted through the government’s welfare bill by 335 votes to 260 - a majority of 75 – after a rebel amendment to kill off the bill was defeated easily after concessions over planned Pip cuts (See 19.27).
The work and pensions secretary, Liz Kendall, ruled out resigning in her interview with Chris Mason, the BBC political editor, saying she wanted to carry on despite her bill only passing after multiple U-turns (See 19.51).
After a week of chaos that left the prime minister’s political authority badly damaged, Labour MPs were finally won over by a commitment to shelve plans for deep cuts to personal independence payments (Pip)
We are closing this blog now. Thank you for reading
Updated
Changes to the universal credit and Pip bill mean no savings for the chancellor in this parliament, according to the Institute for Fiscal Studies (IFS).
Helen Miller, the deputy director of IFS, said there is a “pronounced rise” in working-age health-related benefits. Spending is rising from £52bn last year and, without reform, is forecast to reach £66bn by 2029–30.
The government’s original reform was set to save £5.5bn in the short run (by 2029–30) and double that in the long run when fully rolled out.
Without reform to personal independence payment, the watered down bill is not expected to deliver any savings over the next four years.
This is because over this period the forecast savings from reducing the universal credit (UC) health element for new claimants (£1.7bn in 2029–30) will be roughly offset by the cost of increasing the UC standard allowance.
This is a government with a majority of 165 that is seemingly unable to reform either pensioner winter fuel payments or working-age disability benefits. That doesn’t bode well for those hoping this government will grasp the nettle and address the deeper, structural challenges facing the UK public finances.
Updated
