The former shadow chancellor Ed Balls has criticised plans for cuts to disability benefits, saying on his podcast that it was “not going to work”.
George Osborne, the architect of welfare cuts during the coalition years, also told the same podcast that he had resisted freezing personal independence payments (Pip) – a move currently under consideration – because he felt it was going too far.
Balls, an influential Labour figure who is married to the home secretary, Yvette Cooper, hinted that welfare reforms would be hard for the party to stomach in the context of other cuts.
“It’s one thing to say the economy is not doing well and we’ve got a fiscal challenge, but the context we’re now in is that we are having to increase defence spending and, two weeks ago, it was announced we’re going to cut international aid,” he told the Political Currency podcast.
“But cutting the benefits of the most vulnerable in our society who can’t work, to pay for that, is not going to work. And it’s not a Labour thing to do … It’s not what they’re for.”
Labour MPs have already expressed private concerns that some of t he proposed changes go further than Osborne’s cuts under austerity. Speaking to reporters on Thursday, Keir Starmer insisted again that his plans did not mean a “return to austerity”.
Osborne, who oversaw billions in welfare cuts during his time as chancellor, said he faced strong opposition to freezing Pip. “I didn’t freeze Pip. I thought [it] would not be regarded as very fair. What I did try to do was reform Pip,” he told the podcast.
He said his final budget attempt to reform the generosity of Pip payments, including to those who could do some work, was the final straw that led to the resignation of the then work and pensions secretary, Iain Duncan Smith.
“I had to back down on it. And so it’s all very well saying ‘don’t go for the general freeze, it’s not fair’. However, in politics and often for the Treasury, general freezes have been easier to sell than specific reforms that actually cut in cash terms the payments that certain sections of the disability-claiming community received,” he said.
The Guardian understands that under current plans, the bulk of almost £6bn of cuts will come from the Pip, which is not linked to work, and eligibility criteria for the key disability benefit will be tightened, while some payments are expected to be frozen.
Speaking on a visit to Hull on Thursday, Starmer said the current system “can’t be defended on economic terms or moral terms”. He said: “We’ve set up a system that basically says: ‘If you try the journey from where you are into work and anything goes wrong, you’ll probably end up in a worse position than when you started.’
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“And so understandably, many people say: ‘Well, I’m a bit scared about making that journey.’ Therefore we’re baking in too many people not being able to get into work.”
Asked during a Q&A with journalists after his speech whether he accepted the changes would amount to a return to austerity, he said: “We’re the party of work. We’re also the party of equality and fairness, but we’re not returning to austerity. That’s what I said before the election. That’s what I say now.”
Figures from the Department for Work and Pensions on Thursday found the number of people on the highest rate of universal credit with no support to look for work had almost quadrupled since the pandemic. For younger people under 25, that figure had risen 249%, from 46,000 to 160,000, since the pandemic.
The department said that while a rise in those categorised as “limited capability for work related activity” was expected as part of the transition to universal credit, it had “surged far beyond projections”.
