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

The Department for Work and Pensions
-Credit: (Image: PA)


The Labour Party has confirmed its plans for the benefits system after promising to 'kickstart economic growth' following 14 years of Conservative government.

The party's manifesto spells out broad strategies for getting more people into work, although falls short of specific details on what it intends to do about the planned shake-up of Personal Independence Payment, the accelerated transfer of legacy benefit claimants onto Universal Credit, or the demands for people to repay their Carer's Allowance when they exceeded the earnings threshold, reports BirminghamLive.

However, it does make it clear that it wants to see more disabled people in employment, to be achieved partly by reducing the huge number of Universal Credit claimants written off from looking for a job. It wants to reform or abolish the current assessment that decides if someone is unfit for work.

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

Universal Credit and PIP

Analysts have said the soaring spending on Personal Independence Payment (PIP) needs to be tackled by whichever party is in power. Tom Waters, associate director at the Institute for Fiscal Studies, said: "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."

No mention is made in the Labour manifesto of the DWP's plans, put forward under the Conservatives, to bring down the spiralling costs of PIP with a radical shake-up that could include replacing cash payments with vouchers for purchasing specific equipment and treatment. But Labour is said to have indicated it will study the feedback given to the proposals after the consultation ends on July 22, three weeks after the election.

Labour has confirmed plans to reduce economic inactivity and get more disabled people into jobs and will tackle the large number of people written off through the Universal Credit system. Labour says the work capability assessment - which decides if someone on Universal Credit is fit for work or instead receives an incapacity top-up of £416 a month - needs an overhaul.

Around a third of Universal Credit claimants are in this 'limited capability for work and work-related activity' group. The majority of these people are also in receipt of Personal Independence Payment.

Labour has assured those with disabilities and physical and mental health conditions that they won't get their benefits cut or stopped as soon as they try working. The party's manifesto says: "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%.

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%, 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 £421m so that local authorities could offer their own payments and other forms of help with food and energy bills.

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."