UK deficit plan in doubt amid Tory revolt over disability cuts

Obsborne to consult disability groups about impact of proposed €1bn reduction

George Osborne has promised to eliminate Britain’s budget deficit by 2020 despite a cut in economic growth forecasts and rapidly shrinking fiscal room for manoeuvre. Photograph: Andy Rain/EPA

George Osborne has promised to eliminate Britain’s budget deficit by 2020 despite a cut in economic growth forecasts and rapidly shrinking fiscal room for manoeuvre. Photograph: Andy Rain/EPA

 

A key element of George Osborne’s deficit reduction strategy is in doubt just days after his budget, amid a Conservative revolt over plans to save £1 billion a year by cutting payments to people with disabilities. As Downing Street insisted the government would press ahead with the cuts, Mr Osborne said yesterday that he would consult disability charities about their impact.

“Let me be absolutely clear: this government will always protect the most vulnerable and help disabled people. That’s why the disability budget is going up,” he said.

The chancellor has promised to eliminate Britain’s budget deficit by 2020 despite a cut in economic growth forecasts and rapidly shrinking fiscal room for manoeuvre. The Institute for Fiscal Studies said this week that Mr Osborne had only a 50 per cent chance of meeting the target and would probably need further tax increases or spending cuts to do so.

Cuts to the Personal Independence Payment to people with disabilities were due to save £4.4 billion over the next four years.

The government planned to make the savings by allowing fewer people to qualify for payments for specialist aids and appliances.

Expanded criteria

Justin Tomlinson

The changes could cost some disabled people £3,500 a year and because the payment is not means-tested, the changes will affect more middle class people than many welfare benefit cuts do.

Within hours of the announcement, Conservative MPs voiced concern about its potential impact on up to 400,000 people with disabilities, as Labour leader Jeremy Corbyn offered to work with Tory rebels to defeat it. On Thursday night, Education Secretary Nicky Morgan fuelled speculation about an impending climbdown when she said the proposed cuts were only “a suggestion”.

Firm policy

“We will be taking the opportunity to engage with colleagues who have concerns about the way it will be working,” she said.

As the rebels made clear that they understood the cuts and their impact perfectly well, David Cameron, who was attending an EU summit in Brussels, struck a conciliatory tone.

“We will always protect the most vulnerable people in our country and make sure they get the help they need. We are going to discuss what we’ve put forward with the disability charities and others, as the chancellor said today, and make sure that we get this right,” he said.

“It’s important. It is important that this increase in money goes to the people who need it most, that we make sure that the system is working properly. That’s what this is all about.”