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A government spokeswoman dismissed the leak, saying that the £2.5bn figure was "totally out of date", and that negotiations on ESA were ongoing.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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Election 2017: Which Labour MPs are standing down?

13 Labour MPs have announced they will not fight the June 8 general election.

Theresa May's decision to call a snap election - and the grim outlook for Labour - means a number of the party's MPs will not fight the June 8 poll. Here's a full list. 

Dave Anderson (Shadow Scotland and Northern Ireland Secretary) - Blaydon (14,227 majority)

Tom Blenkinsop - Middlesbrough South and East Cleveland (2,268 majority)

Andy Burnham - Leigh (14,096 majority)

Jim Dowd - Lewisham West and Penge (12,714 majoirty)

Michael Dugher - Barnsley East (12,034 majority)

Pat Glass - North West Durham (10,056 majority)

Alan Johnson - Hull West and Hessle (9,333 majority)

Fiona MacTaggart - Slough (7,336 majority)

Rob Marris - Wolverhampton South West (801 majority)

Steve Rotheram - Liverpol Walton (27,777 majority)

Andrew Smith - Oxford East (15,280 majority)

Gisela Stuart - Birmingham Edgbaston (2,706 majority)

Iain Wright - Hartlepool (3,024 majority)

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