Labour's DWP Universal Credit, PIP, State Pension and cost of living plans

Labour has vowed to "kickstart economic growth" after 14 years of Tory rule. But what does this mean for the benefits system?

The party's manifesto outlines broad strategies for boosting employment, but currently lacks specific details regarding their plans for the proposed revamp of Personal Independence Payment (PIP), the expedited transition of legacy benefit claimants onto Universal Credit, or the requirements for individuals to repay their Carer's Allowance when they inadvertently exceed the earnings limit.

However, Labour does emphasise its intention to increase employment among disabled people, which will be partly achieved by reducing the vast number of Universal Credit claimants who are dismissed from job hunting. It aims to reform or abolish the current assessment that determines if someone is unfit for work..

READ MORE: What should the new Labour Government do first after winning the 2024 General Election?

The manifesto states that "too many people are out of work or not earning enough" and attributes part of the blame to NHS waiting lists for treatment, BirminghamLive reports. Here's what the party has said so far about its plans:

Universal Credit and PIP

Experts are sounding the alarm over the rocketing costs of Personal Independence Payment (PIP), urging action from any future government. Tom Waters, Associate Director at the Institute for Fiscal Studies, highlighted the issue: "The number of people receiving financial support from the government for a health-related benefit has increased sharply since the pandemic and is forecast to continue growing. This is one of the big drivers of the large increase in public spending since 2019 and into the next parliament. So it is understandable that whoever is in office after the election should want to take a careful look at this."

While the Labour manifesto remains silent on the DWP's controversial Conservative-led plans to curb PIP expenses through a major overhaul, including potentially swapping cash payments for vouchers, Labour insiders have reportedly signalled a willingness to review the feedback from the ongoing consultation, which concludes on July 22, just weeks post-election.

Labour has unveiled plans to slash economic inactivity and boost employment among disabled individuals, targeting the swathes of people side-lined by the Universal Credit system. The party is calling for a revamp of the work capability assessment, which determines whether Universal Credit recipients are fit for employment or eligible for an additional incapacity benefit of £416 monthly.

A significant portion of Universal Credit beneficiaries fall into this 'limited capability for work and work-related activity' category, with many also receiving Personal Independence Payment.

Labour has pledged that those with disabilities and health issues won't face cuts or cessation of benefits when they attempt to work.

Their manifesto outlines: "Too many people are out of work or not earning enough. Long waits for treatment of health conditions, particularly mental health, are contributing to the rise in economic inactivity. Labour will reform employment support so it drives growth and opportunity. Our system will be underpinned by rights and responsibilities people who can work, should work and there will be consequences for those who do not fulfil their obligations."

"Labour will work with local areas to create plans to support more disabled people and those with health conditions into work. We will devolve funding so local areas can shape a joined-up work, health, and skills offer for local people. We will tackle the backlog of Access to Work claims and give disabled people the confidence to start working without the fear of an immediate benefit reassessment if it does not work out. We believe the Work Capability Assessment is not working and needs to be reformed or replaced, alongside a proper plan to support disabled people to work."

State Pension

Labour has vowed to keep the triple lock system used to work out the annual increase in the State Pension. It means pensions go up every April by the highest of three factors: the previous September's Consumer Price Index measure of inflation, May-July earnings growth, or a default minimum of 2.5 per cent.

Although there are concerns that the triple lock is not sustainable in the long term, Labour has said it will retain it for the time being. It said: "We will keep the pension triple lock and give pensioners security in retirement. Labour will protect the triple lock on pensions and increase the State Pension each year in line with inflation, average earnings, or by 2.5 per cent, whichever is higher."

Cost of living

Under the Conservative Government, the Department for Work and Pensions said it was not planning any more cost of living payments. But it has extended the Household Support Fund until September 30, ploughing in another £421 million so that local authorities could offer their own payments and other forms of help with food and energy bills. Birmingham, for instance, is providing £200 payments called hardship grants to low-income families and individuals who meet the criteria of receiving specific benefits.

Labour has not proposed any further cost of living payments, nor has it said what will happen with the Household Support Fund beyond September. But it has outlined measures to tackle the cost of living crisis.

The party says "the eye-watering cost of living" is a direct result of Rishi Sunak and 14 years of the Conservatives in power and that under the Tories people's living costs would rise by £5,883 a year, including £479 more on energy, £1,040 on groceries, £421 on council tax, £2,880 on mortgages, £189 on motoring and £874 on personal tax.

Labour promises "to deliver economic stability with tough spending rules, so we can grow our economy and keep taxes, inflation, and mortgages as low as possible." It says it will tackle "out of control bills" by launching Great British Energy, a publicly-owned clean power company paid for by a windfall tax on oil and gas giants, to cut annual energy bills for good, and will also insulate millions of homes.

It is also planning to "make work pay" by "banning exploitative zero hours contracts, ending fire and rehire, and delivering a genuine living wage that for the first time takes account of the cost of living." Labour says: "The New Deal is a core part of our mission to grow Britain's economy and raise living standards in every part of the country. Labour will make Britain work for working people."

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