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A government spokeswoman dismissed the leak, saying that the £2.5bn figure was "totally out of date", and that negotiations on ESA were ongoing.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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Commons Confidential: What happened at Tom Watson's birthday party?

Finances, fair and foul – and why Keir Starmer is doing the time warp.

Keir Starmer’s comrades mutter that a London seat is an albatross around the neck of the ambitious shadow Brexit secretary. He has a decent political CV: he was named after Labour’s first MP, Keir Hardie; he has a working-class background; he was the legal champion of the McLibel Two; he had a stint as director of public prosecutions. The knighthood is trickier, which is presumably why he rarely uses the title.

The consensus is that Labour will seek a leader from the north or the Midlands when Islington’s Jeremy Corbyn jumps or is pushed under a bus. Starmer, a highly rated frontbencher, is phlegmatic as he navigates the treacherous Brexit waters. “I keep hoping we wake up and it’s January 2016,” he told a Westminster gathering, “and we can have another run. Don’t we all?” Perhaps not everybody. Labour Remoaners grumble that Corbyn and particularly John McDonnell sound increasingly Brexitastic.

To Tom Watson’s 50th birthday bash at the Rivoli Ballroom in south London, an intact 1950s barrel-vaulted hall generous with the velvet. Ed Balls choreographed the “Gangnam Style” moves, and the Brockley venue hadn’t welcomed so many politicos since Tony Blair’s final Clause IV rally 22 years ago. Corbyn was uninvited, as the boogying deputy leader put the “party” back into the Labour Party. The thirsty guests slurped the free bar, repaying Watson for 30 years of failing to buy a drink.

One of Westminster’s dining rooms was booked for a “Decent Chaps Lunch” by Labour’s Warley warrior, John Spellar. In another room, the Tory peer David Willetts hosted a Christmas reception on behalf of the National Centre for Universities and Business. In mid-January. That’s either very tardy or very, very early.

The Labour Party’s general secretary, Iain McNicol, is a financial maestro, having cleared the £25m debt that the party inherited from the Blair-Brown era. Now I hear that he has squirrelled away a £6m war chest as insurance against Theresa May gambling on an early election. Wisely, the party isn’t relying on Momentum’s fractious footsloggers.

The word in Strangers’ Bar is that the Welsh MP Stephen Kinnock held his own £200-a-head fundraiser in London. Either the financial future of the Aberavon Labour Party is assured, or he fancies a tilt at the top job.

Dry January helped me recall a Labour frontbencher explaining why he never goes into the Commons chamber after a skinful: “I was sitting alongside a colleague clearly refreshed by a liquid lunch. He intervened and made a perfectly sensible point without slurring. Unfortunately, he stood up 20 minutes later and repeated the same point, word for word.”

Kevin Maguire is the associate editor (politics) of the Daily Mirror

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 19 January 2016 issue of the New Statesman, The Trump era