The actual impact of Labour’s welfare reforms could be closer to £9 billion nearly double the government’s stated £4.8 billion figure according to new analysis from the New Economics Foundation (NEF). The think tank warns these deeper than claimed cuts may plunge an additional 100,000 people into poverty beyond official estimates.
While Chancellor Rachel Reeves presented the reductions as £4.8 billion in last month’s spring statement a figure verified by the Office for Budget Responsibility (OBR) – the NEF report reveals £2 billion in hidden cuts. This discrepancy stems from the OBR’s accounting method, which deducted £1.6 billion from the total after Labour abandoned Conservative plans to reform Work Capability Assessments.
The controversial reforms primarily target health and disability benefits, with Work and Pensions Secretary Liz Kendall defending them as creating “a welfare system where work always pays.” However, disability advocates warn the measures will disproportionately harm vulnerable claimants.
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