PM considers U-turn on cut to benefits for disabled people

Ministers have left the door open to a humiliating U-turn on their highly contentious plans to cut benefits for disabled people, amid mounting uproar over the proposals across the Labour party.

- Toby Helm & James Tapper

Both Downing Street and the Department for Work and Pensions did not deny they were about to back track on plans to impose a real-terms cut to the personal independence payment (Pip) for disabled people, including those who cannot work, by cancelling an inflation-linked rise due to come into force next spring.

The plans had been earmarked for inclusion in a green paper scheduled to be published on Tuesday and had been one of several elements of a wider package of welfare cuts designed to save between £5bn and £6bn on the ballooning benefits bill.

Ministers, who are facing the wrath of Labour MPs and peers over the plans, are understood to have taken fright after being accused in meetings with MPs of planning measures rejected as unfair even by former Tory chancellor George Osborne during the Conservative years of austerity.

In his Political Currency podcast last week with former Labour shadow chancellor Ed Balls, Osborne said: "I didn't freeze Pip. I thought [it] would not be regarded as very fair. What I did try to do was reform Pip."

Balls, who is married to the home secretary, Yvette Cooper, infuriated Downing Street by saying on the same podcast that the plan would not work if its aim was to get more people back into work, adding that "it's not a Labour thing to do".

At a tense cabinet meeting last Tuesday, several serving members raised their concerns about how the Labour government would be viewed if it froze Pip payments and made it more difficult to receive them.