Osborne secretly plans £2.5bn cut to sickness benefit

Leaked document shows that the Chancellor wants to slash support for people too ill to work.

Leaked document shows that the Chancellor wants to slash support for people too ill to work.

Leaked documents have shown that George Osborne is secretly planning to cut sickness benefits by £2.5bn.

The plan is detailed in a confidential letter from Osborne to the Work and Pensions Secretary, Iain Duncan Smith, which was seen by the Observer.

Written on 19 June (three days before the Emergency Budget) and also sent to David Cameron and Nick Clegg, the letter says:

Given the pressure on overall public spending in the coming period, we will need to continue developing further options to reform the benefits as part of the spending review process in order to deliver further savings, greater simplicity and stronger work incentives.

Reform to the employment support allowance is a particular priority and I am pleased that you, the prime minister and I have agreed to press ahead with reforms to the ESA as part of the spending review that will deliver net savings of at least £2.5bn by 2014-15.

The employment and support allowance (ESA) is the successor to incapacity benefits, and is paid to those who are unable to work because of disability or illness.

Duncan Smith is currently locked into negotiations with the Treasury over his proposed reform to the welfare system, which will require immediate investment in order to incentivise working in the long-term.

This revelation has done little to ease the tension. The Department for Work and Pensions insisted that nothing has been decided, stressing that "our reforms will ensure that the most vulnerable in our society are protected." Some within Duncan Smith's camp have even accused the Treasury of leaking the letter to force them into accepting the plan.

The proposed cuts are disturbing, but hardly surprising. Just last week, Osborne launched an astonishing attack on people who have made the "lifestyle choice" to be on benefits, announcing an extra £4bn cuts.

A government spokeswoman dismissed the leak, saying that the £2.5bn figure was "totally out of date", and that negotiations on ESA were ongoing. Possible changes could include means-testing recipients, and limiting the amount of time that people can spend on ESA.

The Institute for Fiscal Studies showed unequivocally last month that the Budget was regressive, and would disproportionately affect the very poorest in society. To this already punitive Budget, with its drastic cuts to housing benefits, add the extra reductions that Osborne announced last week and this latest news. You have a picture of an assault on the welfare state and a worrying propensity to go after the most vulnerable in society.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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Grenfell survivors were promised no rent rises – so why have the authorities gone quiet?

The council now says it’s up to the government to match rent and services levels.

In the aftermath of the Grenfell disaster, the government made a pledge that survivors would be rehoused permanently on the same rent they were paying previously.

For families who were left with nothing after the fire, knowing that no one would be financially worse off after being rehoused would have provided a glimmer of hope for a stable future.

And this is a commitment that we’ve heard time and again. Just last week, the Department for Communities and Local Government (DCLG) reaffirmed in a statement, that the former tenants “will pay no more in rent and service charges for their permanent social housing than they were paying before”.

But less than six weeks since the tragedy struck, Kensington and Chelsea Council has made it perfectly clear that responsibility for honouring this lies solely with DCLG.

When it recently published its proposed policy for allocating permanent housing to survivors, the council washed its hands of the promise, saying that it’s up to the government to match rent and services levels:

“These commitments fall within the remit of the Government rather than the Council... It is anticipated that the Department for Communities and Local Government will make a public statement about commitments that fall within its remit, and provide details of the period of time over which any such commitments will apply.”

And the final version of the policy waters down the promise even further by downplaying the government’s promise to match rents on a permanent basis, while still making clear it’s nothing to do with the council:

It is anticipated that DCLG will make a public statement about its commitment to meeting the rent and/or service charge liabilities of households rehoused under this policy, including details of the period of time over which any such commitment will apply. Therefore, such commitments fall outside the remit of this policy.”

It seems Kensington and Chelsea council intends to do nothing itself to alter the rents of long-term homes on which survivors will soon be able to bid.

But if the council won’t take responsibility, how much power does central government actually have to do this? Beyond a statement of intent, it has said very little on how it can or will intervene. This could leave Grenfell survivors without any reassurance that they won’t be worse off than they were before the fire.

As the survivors begin to bid for permanent homes, it is vital they are aware of any financial commitments they are making – or families could find themselves signing up to permanent tenancies without knowing if they will be able to afford them after the 12 months they get rent free.

Strangely, the council’s public Q&A to residents on rehousing is more optimistic. It says that the government has confirmed that rents and service charges will be no greater than residents were paying at Grenfell Walk – but is still silent on the ambiguity as to how this will be achieved.

Urgent clarification is needed from the government on how it plans to make good on its promise to protect the people of Grenfell Tower from financial hardship and further heartache down the line.

Kate Webb is head of policy at the housing charity Shelter. Follow her @KateBWebb.