Reeves faces Labour revolt as benefits blitz to plunge 250k – including 50k kids – into poverty
RACHEL Reeves faces a Labour revolt as it emerged her benefits blitz will plunge 250,000, including 50,000 children, into poverty.
The effect of the Chancellor’s purge has stirred up dozens of Labour MPs who are threatening to vote against it.
She has cut back harder after budgeting watchdogs rubbished her forecasts.
To plug a £1.6billion black hole, she froze the Universal Credit health top-up at £50 a week for new claimants and cut the standard rate rise to £106.
A total of 370,000 people will be losing their PIP payments, while 2.25million will have health support frozen.
More than 3million households will lose £1,720 a year on average, according to the Government’s own analysis.
In a clumsily worded justification, Treasury Minister Darren Jones likened the plans to stealing children’s pocket money.
Labour MP Debbie Abrahams said the reforms would worsen health.
Ms Reeves said she was confident her £1billion jobs support package would lift families out of poverty.
She said the 250,000 figure in the analysis was based on no one getting back to work.
It comes as fears of a global trade war worsened after US President Donald Trump imposed a 25 per cent tariff on all vehicles imported into the US.
The tax, due to go into effect in early April, could severely damage many UK car manufacturers who rely on exporting their cars to the US.
In 2023, cars were the second most valuable good exported from the UK to the US, with £6.4 billion worth of vehicles making their way across the pond that year.
There are fears of a financial squeeze on automakers who depend on global supply chains, and this will likely raise the price of vehicles in the US.
A knock-on effect could see Trump’s tariffs lead to an increase in prices in the UK, especially for cars and vehicle parts.
What are Work Capability Assessments?
The DWP uses the Work Capability Assessment (WCA) to evaluate a claimant's ability to work when applying for Universal Credit due to a health condition or disability.
The WCA focuses on assessing functional limitations rather than specific medical diagnoses.
It considers both physical and mental health, awarding points based on how an individual’s condition impacts their ability to carry out daily activities.
After the assessment, claimants may be placed into one of two groups – Limited Capability for Work (LCW) or Limited Capability for Work and Work-Related Activity (LCWRA).
Claimants assigned to the LCW group are recognised as currently unfit for work but may be capable of returning to employment in the future with the right support and assistance.
Those in this group are required to engage in work-related activities, such as attending Jobcentre appointments or training courses.
Failure to comply with these requirements may result in sanctions, including a reduction or suspension of benefits.
Claimants are placed in the LCWRA group if their health condition or disability is considered so severe that they are not expected to be able to work or participate in any work-related activities in the foreseeable future.
Those in the LCWRA group receive an additional amount on top of their standard Universal Credit allowance currently worth £416.19 a month.
What is the Universal Credit standard allowance?
The standard allowance is the basic monthly payment provided to individuals or families who qualify.
The amount you receive depends on your age and whether you’re single or in a couple:
- Single, under 25: £311.68 (£316.98 from next month)
- Single, 25 or over: £393.45 (£400.14 from next month)
- Couple, both under 25: £489.23 (£497.55 from next month)
- Couple, one or both 25 or over: £617.60 (£628.09 from next month)
You may also be eligible for additional amounts if you have children, have a disability or health condition, or need help with housing costs.