Good morning. At prime minister’s questions yesterday, Keir Starmer laid the groundwork for what is likely to be a major controversy facing his government in the weeks leading up to the chancellor’s spring statement: cuts to incapacity and disability benefits. The system is “broken”, he said: “It is indefensible, economically and morally, and we must and we will reform it.”
All of which sounds reasonable enough. But to many observers, the reality of what Labour is planning – a £6bn cut made mostly through the key disability benefit, personal independence payments (Pip) – looks much more alarming: an attempt to balance the budget on the backs of disabled people. Last night, Pippa Crerar reported that the issue could bring the biggest rebellion of Starmer’s premiership, with dozens of MPs urging the government to think again.
Today’s newsletter explains the grim economic outlook prompting the proposed cuts, the reasons for the growth of the benefits bill, and the likely impact on those who rely on Pip to survive. Here are the headlines.
Five big stories
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Ukraine | Donald Trump has suggested he could target Russia financially as Ukraine’s president urged him to take strong steps if Moscow failed to support a 30-day ceasefire, agreed at a meeting between Ukrainian and US delegations in Saudi Arabia. US envoys are expected to hold talks with Vladimir Putin by the end of the week.
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UK news | The arrested master of the Solong, a container ship that crashed into another vessel in the North Sea, is a Russian national, its management company has confirmed. The 59-year-old was arrested on suspicion of gross negligence manslaughter on Tuesday after Monday’s fiery collision.
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Southport attack | The decision not to classify Axel Rudakubana as a terrorist was right because it would be unhelpful to stretch the definition of terrorism to cover all extreme violence, the UK’s terror watchdog has concluded. Jonathan Hall KC said that the designation should continue to be used only for violence in “a political, religious, racial or ideological cause”.
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Greenland | Greenland has voted for a complete overhaul of its government in a shock result in which the centre-right Democrat party more than tripled its seats. The vote followed a dramatic election campaign fought against the backdrop of Trump’s threats to acquire the Arctic island.
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Health | A new daily pill that could transform the way endometriosis is treated has been approved for use on the NHS across England, the medicines watchdog has announced. The medication eliminates the need for multiple medications and regular trips to clinics for injections.
In depth: ‘The reality is, we’re attacking the worst-off’
Ahead of Rachel Reeves’s spring statement in two weeks’ time, the chancellor finds herself operating in even more constrained fiscal circumstances than she expected when she set out her first budget last October. Back then, the Office for Budget Responsibility (OBR) estimated that she would have £9.9bn available to spend against her self-imposed limits on borrowing; but with borrowing costs up, persistent inflation, and an uncertain global economic outlook driven by Donald Trump’s tariffs, that headroom looks to have disappeared.
Reeves had hoped that the spring statement would not be a major economic set piece. But now, with new OBR forecasts in mind, she has decided that rather than increase taxes or change the borrowing rules in light of exceptional circumstances, she will make significant spending cuts. One of the key targets for the cuts has been the incapacity and disability benefits system.
Why has the benefits bill grown?
Health-related benefits are being targeted in part because they are costing more and more each year. In 2023-24, the UK spent £48bn on incapacity and disability benefits for the working-age population, the Institute for Fiscal Studies (IFS) says – a real-terms increase of £12bn on 2019-20. OBR forecasts suggest that the bill for the working age population could reach £67bn by 2030.
The IFS report sets out clear evidence that a key factor is a post-pandemic increase in mental health or behavioural conditions, accounting for more than half of the rise and 44% of all claimants. But it also notes that comparable countries have not seen a similar rise in benefit claims since the coronavirus crisis.
The Resolution Foundation says that one factor is the halving of the rate at which people move off incapacity benefit since 2012, at a cost of £600m a year. But as it also says, “Britain is getting older and sicker – which the benefits system cannot solve”.
Experts also say that the very low basic rate of jobless benefit pushes the health-related benefit bill up. A new report from the National Institute of Economic and Social Research finds that the UK’s social safety net for the unemployed is less generous than all but two of the 38 countries in the OECD.
Can the problem be solved quickly?
The shift has also been accompanied by lengthening NHS waiting lists and worsening indices of deprivation that are often linked to mental health problems. To make a lasting change to the trend is therefore likely to require investment, and patience. To make a dent by the end of the month, Labour is focused instead – as the work and pensions secretary, Liz Kendall, told ITV last month – on a narrative warning that “more of those people could work” and “there are people who shouldn’t be on benefits who are taking the mickey”.
Against that narrative – of a system spiralling out of control because of a category of people cheating the taxpayer – is the fact that the benefits bill has risen as you would expect given increases in the number of people who are long-term sick or disabled indicated by other sources. Last year, the Department for Work and Pensions estimated the fraud rate among those claiming personal independence payments (Pip), the main working-age benefit for people with disabilities, at 0.4%.
Disability advocacy groups and people with long experience of claiming these benefits also note that since the coalition government began moving from disability living allowance to Pip payments in 2013, the success rate for new claims has fallen significantly. Applicants say that it is now more complicated and burdensome to make a claim than ever, with stricter assessment criteria, long delays to decisions, and more regular assessments, even when a disability is severe and lifelong.
What are the changes being considered?
One strategy that Liz Kendall, the work and pensions secretary, has deployed is to seek to persuade the OBR to put the highest possible value on long-term reforms. That means, for example, recognising the long-term economic impact of getting people back to work as well as the immediate saving to the public purse. And about £1bn will be invested in helping the long-term sick back into work.
But the brunt of the changes may seem to merit the epithet said to have been applied to parallel cuts to the civil service by Labour Together, a thinktank with close links to the government: “Project chainsaw”.
ITV’s Anushka Asthana was first to report some of the details of the proposed measures, which may still change:
Making it harder to qualify for Pip payments, which are worth between £1,500 and £9,610 a year. Pip is not means-tested, and not linked to whether or not the recipient is in work: instead, it is supposed to defray some of the significant additional costs borne by people with disabilities. The average extra cost for each household with at least one disabled adult or child was £1,122 a month in 2022-23, Scope’s disability price tag report estimates, far more than is covered for even those in the highest Pip band.
Freezing Pip payments next year, a real-terms cut once inflation is taken into account.
Raising the basic rate of universal credit paid to those looking for work while cutting the rate for those judged unfit for work. The government argues that this change is a necessary rebalancing to a system which at the moment incentivises people to be categorised as sick and unable to work. Critics – like the Guardian’s Frances Ryan – regard the proposal as “a particularly blatant message” demonising those who cannot work.
Taken together, all of this would be worth about £6bn a year, the bulk of it through the Pip system. That is a significant contribution to Reeves’s target. But it will involve a fundamental re-evaluation of who counts as being disabled, and what the state owes them.
What kind of rebellion might the government face?
Before the last election, when the Conservative government was setting out plans to overhaul the “sicknote culture” because too many people were being signed off as a result of being “rather down and bluesy”, Labour sought to present itself as a protector of those unable to work through no fault of their own.
In 2024, Alison McGovern, Labour’s then acting shadow work and pensions secretary, blamed the Tories for “a record number of people locked out of work due to long-term sickness”. And, in 2023, Vicky Foxcroft, then shadow minister for disabled people, said Labour wanted “a fairer system, we want one that’s more compassionate … we need to get rid of that culture of fear.”
In government, the party’s emphasis is different. That has led to significant disquiet among some backbenchers, as Aletha Adu reported last night. There is no moral case,” one said. “The [benefits bill] figures are worrying but the reality is, we’re attacking the worst-off.”
But most MPs are likely to stick with the government when it puts these changes to a vote. That may help Reeves get through the next month. But if a significant number of those forced off the benefits end up in poverty, there will be a very heavy price to pay.
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What else we’ve been reading
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When the rebels swept through Syria in November, Bashar al-Assad’s forces just melted away. But what becomes of them now? Ghaith Abdul-Ahad’s long read is the story of one of them, and perhaps the most remarkable piece about the aftermath of the civil war that I’ve read yet. Archie
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Break Point. Full Contact. Unchained. From tennis to cycling, every sport seems to have its own supposedly gritty, behind-the-scenes documentary. Amid the trend, Jack Seale argues there is one show in pole position, which is genuinely “one of the most influential shows of the decade”: the Formula One series Drive to Survive. Charlie Lindlar, acting deputy editor, newsletters
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Halfway through Ramadan, Nesrine Malik goes round the globe for our Long Wave newsletter to explore different holy month traditions among the diaspora. Charlie
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Ruth Marcus wrote a column for the Washington Post decrying owner Jeff Bezos’ decision to devote its opinion pages to making the case for “personal liberties and free markets”, with no dissenting views. Fittingly enough, it was spiked, and she resigned. Now she writes for the New Yorker about Bezos’ drift towards acquiescence in the second Trump era. Archie
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In this column, Jonathan Portes has a go at defining “Maganomics”, Trump’s scattershot, highly disruptive economic strategy. He concludes it is “not just inconsistent but dangerous – and will probably end not with a whimper but a bang”. Charlie
Sport
Champions League | Real Madrid beat their local rivals Atlético in a dramatic shootout to advance to the quarter-finals of the Champions League after a 2-2 aggregate draw. Atlético’s Julian Alvarez’s penalty was ruled out by VAR for a double touch. Meanwhile, Arsenal eased into the next round with a 9-3 aggregate win against PSV and Aston Villa set up a tie with PSG with a 6-1 margin against Club Brugge across the two legs.
Horse racing | Tributes to the late jockey Michael O’Sullivan, who died last month after a fall at age 24, marked the day at Cheltenham on Wednesday, as two horses he previously rode to victory at Cheltenham won again. Marine National won the Queen Mother Champion Chase before Jazzy Matty won the Johnny Henderson Grand Annual Challenge.
Women’s Super League | The Women’s Super League’s £65m TV contract with Sky Sports and the BBC will have to be renegotiated if it removes relegation from the top flight, the Guardian has learned. The deal is widely regarded as a game-changer for women’s football in England because it is worth almost double the previous contract.
The front pages
The Guardian splash today is “Starmer faces MPs’ anger over major cuts to welfare”. The i covers the same subject, with “Benefits turmoil in No 10 as Labour MPs fight Reeves plan to cut welfare”. Meanwhile, the government plans major changes to the civil service – that’s what the Daily Telegraph is running with: “I’ll tackle ‘flabby’ state, vows Starmer”. The Daily Mail has “Record 5 million forced to pay higher tax rate”.
The Times goes with “Back peace or I’ll ruin you, Trump tells Putin” as the world awaits the Russian leader’s response to a proposed ceasefire deal. The Metro splashes on “Deal or no steel” as Trump’s global tariffs come into effect and the Mirror leads on possible job cuts with “Trade war hammer blow”. The Daily Express is running with “Caring Queen’s support for rape survivor Gisele”, referring to the high-profile case of Gisèle Pelicot in France, while the Financial Times has “City watchdog scraps diversity and inclusion drive after firms’ backlash”.
Today in Focus
Is Nigel Farage losing his grip on Reform UK?
The Reform MP Rupert Lowe has been suspended from the party. What’s behind his feud with its leader? Eleni Courea reports
Cartoon of the day | Ben Jennings
The Upside
A bit of good news to remind you that the world’s not all bad
Nasa’s newest space telescope rocketed into orbit on Tuesday to map the cosmos in never-before-seen detail, examining hundreds of millions of galaxies and their shared cosmic glow. The $488m Spherex mission aims to explain how galaxies evolved over billions of years. The telescope will circle the globe over two years, from pole to pole, 400 miles (650km) up.
Instead of focusing on galaxies themselves in detail, as Nasa’s larger space telescopes do, Spherex will observe the total glow produced by the whole lot, including the earliest ones formed in the wake of the universe-creating big bang.
“This cosmological glow captures all light emitted over cosmic history,” said Jamie Bock, the mission’s chief scientist, of the California Institute of Technology. “It’s a very different way of looking at the universe.”
Bored at work?
And finally, the Guardian’s puzzles are here to keep you entertained throughout the day. Until tomorrow.