Labour unveils disability benefits reforms that aim to save more than £5bn

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Sir Keir Starmer’s government has unveiled reforms to disability benefits that it says will save more than £5bn a year by the end of the decade, in a move that risks stoking the biggest backbench rebellion of his premiership.

The plans, presented by UK work and pensions secretary Liz Kendall on Tuesday, would cut disability and incapacity benefits for hundreds of thousands of people by the 2029-30 financial year.

The Labour government, which is seeking to plug a fiscal gap in its plans, argues that without reform, Britain’s welfare costs will balloon and a generation of young people risks lacking incentives to work.

But the proposals, outlined in a consultative green paper, have already sparked a widespread backlash within Labour, with MPs and voters saying that the government should not target the poorest in society.

The biggest proposed changes to the system involve tightening eligibility rules for personal independence payments, the main form of disability benefit. This would make it harder for people with mental health conditions and less severe physical difficulties to receive the support.

Labour is seeking to find billions of pounds in savings ahead of chancellor Rachel Reeves’ March 26 Spring Statement, because of recent projections by the UK’s independent budget watchdog that have indicated that the government’s fiscal room for manoeuvre is shrinking.

This is a developing story