Politics DWP rule change to see 400,000 Britons lose benefits as Reeves plots £3bn in cuts - who will be impacted?

Chancellor Rachel Reeves is set to implement £3billion in benefit cuts over the next four years by tightening access to sickness benefits.

The new Labour Government's plan, originally proposed by the previous Conservative Government, aims to reform work capability rules.



Under this scheme, an estimated 400,000 more individuals currently on long-term sick leave would be reassessed as needing to prepare for employment by 2028/29.

Examples of disability and sickness benefits administered by the Department for Work and Pensions (DWP) include Personal Independence Payment (PIP) and Attendance Allowance.

While Reeves is expected to commit to the £3billion savings target, the specifics of how the system will be altered to achieve this goal will be determined by Work and Pensions Secretary Liz Kendall.

A Government spokesperson stated: "We have always said that the Work Capability Assessment is not working and needs to be reformed or replaced alongside a proper plan to support disabled people to work.

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"We will deliver savings through our own reforms, including genuine support to help disabled people into work."

These cuts are part of Labour's broader budget strategy to raise up to £40billion through tax increases and spending reductions. This approach aims to avoid a return to austerity measures.

Sir Keir Starmer faced criticism from Cabinet members over the proposed cuts. Several ministers directly expressed concerns to the Prime Minister about potential 20 per cent reductions in their departmental spending.

Downing Street warned that "tough decisions" would be necessary, stating not every department would be able to fulfil all their desired objectives.



While spending cuts are expected, tax increases are likely to be the cornerstone of Reeves' plan to address what Labour calls a "black hole" in public finances left by their Conservative predecessors.

Reports suggest capital gains tax and inheritance tax may be among the targets for revenue raising.

The Budget is scheduled for delivery on October 30. Reeves will meet with City bosses on Friday for the inaugural gathering of Labour's British infrastructure taskforce.

This initiative aims to seek advice on boosting UK investment. Finance leaders from HSBC, Lloyds, and M&G will participate in these regular discussions.



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Reeves stated their expertise will be "invaluable" as the Government pursues its "number one mission to grow the economy and create jobs".

The Chancellor will hold talks with City bosses on Friday at the first meeting of Labour's British infrastructure taskforce.

Chief Secretary to the Treasury Darren Jones stated the task force would aim to "end the cycle of underinvestment that has plagued our infrastructure systems for over a decade".

This move comes as part of the Labour Government's efforts to strengthen the economy and address financial challenges.

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