PIP Changes: Impact on Carer’s Allowance

(Urgent Question): To ask the Secretary of State for Work and Pensions if she will make a statement on the changes to personal independence payments and how that will impact those who receive carer’s allowance.

The “Pathways to Work” Green Paper sets out our plan to fix a broken system, providing proper employment support for those who can work, and a strong and sustainable safety net for everybody who needs it. We will change personal independence payments to focus support on those in the greatest need. That change will be in primary legislation, with a full debate and scrutiny in Parliament. The cost of personal independence payments has increased by £2 billion above inflation in each of the past five years, and those increases are carrying on. That is simply not sustainable.

In the Green Paper, we are consulting on how best to support those affected by the changes to eligibility, for example with transitional protections for those no longer eligible for PIP and for the entitlements linked to it, including carer’s allowance, as referenced in the hon. Member’s urgent question, and the universal credit carer element, which is an increasingly important part of the picture. The PIP changes will be implemented from November next year. They will apply to new claimants and to people at their award review after that date, and those with severe conditions who will never work will be protected.

I pay tribute to the millions of unpaid carers across the country. We recognise and value their vital contribution, providing care and continuity of support, including to many people with disabilities. The 2021 census indicated that approximately 5 million people in England and Wales are doing some unpaid care. As the hon. Member knows, we are delivering the biggest ever cash increase in the earnings threshold for carer’s allowance, increasing it by £45 a week to £196, benefiting more than 60,000 carers by 2029-30. Our reforms will build a system that is fairer and more sustainable so that it will always be there for those with the greatest needs to live with the dignity and support that they are entitled to.

Yesterday saw the biggest cuts to carer’s allowance for decades. Although we need to manage down appropriately the benefits budget, that needs to be done in a way that is caring, compassionate and far from rushed, which is what we saw yesterday. We are looking at approximately 150,000 carers losing allowances under these proposals. Half a billion pounds will be taken away from those who care. The Joseph Rowntree Foundation suggests that some couples will lose £12,000 a year, when PIP cuts and carer’s allowance cuts are taken into account. While I welcome the apology that the Chief Secretary to the Treasury gave yesterday in relation to his references to pocket money, will the Minister agree that it is inappropriate to compare cuts to PIP with cuts to pocket money?

I very much agree that this all needs to be done in a managed and compassionate way, which is exactly what we are doing, so I do not agree that it is being rushed. As I have said, the changes will not happen for more than 18 months—they will not take effect until November 2026. They will not affect current recipients of personal independence payment until their first award review after November 2026, and review periods are typically three years, so this is definitely not being rushed. It will happen in a properly planned, staged and careful way.

The hon. Gentleman referred to couples losing £12,000. I think he must be referring to instances of people who receive personal independence payment and also receive carer’s allowance for caring for their spouse—he is right that there are some instances of that. There are couples for whom that happens both ways. The transitional arrangements we are consulting on, which are referred to in the Green Paper, need to take account of that incidence, but it is absolutely the right thing to do, to ensure that personal independence payment continues in the long term as part of a sustainable benefit system.

We do have to make some reductions, as I think the hon. Gentleman acknowledged. If he has another idea on how that can be done, I am interested to know what it is. By concentrating on those whose impairments are the most severe, which the proposed changes will do, we will be able to ensure that the benefit is there for the long term and that it is sustainable.

Does my right hon. Friend agree that in order to safeguard the future of the welfare system, we must ensure that it is sustainable?

My hon. Friend is absolutely right; we have to do that. Five years ago, we were spending £12 billion on personal independence payment, and this year, in current prices, we will spend £22 billion. The Government have to address that, precisely as he says, in order to ensure that this crucial safety net is there for the long term. We will not be means-testing it, freezing it or converting it into vouchers, as the Conservative party suggested; we want it to be a cash benefit that can meet the needs of those who depend on it.

I call the shadow Minister.

I congratulate the hon. Member for Torbay (Steve Darling) on bringing this important matter before the House. In government, my party supported carers: we increased carer’s allowance by £1,500 and, with the support of the Liberal Democrats, introduced carer’s leave. We are united again today in dismay at what this Government are doing.

The Government had 14 years to prepare their welfare reforms. We had nothing for eight months, and then everything in a rush, because the Chancellor crashed the economy. With growth this year cut in half, inflation rising further, unemployment up, productivity down, debt interest soaring, a record tax burden and 200,000 people being pushed into absolute poverty by the measures taken by this Government, they have had an emergency Budget containing cuts to benefits for disabled people. Perhaps if they were not in such a rush, they would have realised that these crude reforms also impact carers. Some 150,000 people who gave up income to look after a loved one, and who rely on carer’s allowance to make ends meet, are now going to lose it.

The Government are balancing the books on the backs of the people least able to take the weight. That is Labour: making other people pay for the fiasco of their Budget. First they came for the farmers, then for the pensioners, and now it is the carers—the most important people in our society, doing the most important job a human being can do, not for the money but for the love. The least the Government can do is to give them our support. That is what we did in government, so why will they not?

Can the Minister confirm whether carer’s allowance was a deliberate target of the Government’s reforms, or did they not realise the impact of what they were doing to PIP because of the rush they were in? Do they think that taking £500 million from carers while giving above-inflation pay awards to the trade unions is the right priority, and does the Minister share the Chief Secretary to the Treasury’s view that cutting support for carers and disabled people is like taking pocket money from children? Is that what he believes carer’s allowance is—pocket money?

I suppose the hon. Gentleman has no choice but to attempt to defend his party’s record in government. As I have referred to already, the Conservative party’s plan was to convert PIP into vouchers—that really frightened people who were dependent on that system—and they also wanted to make some big cuts to the work capability assessment, which were ruled out by the courts as unlawful. We announced in the Green Paper that we are going to abandon those cuts. For example, the Conservatives were proposing to remove the mobility descriptor from the work capability assessment on the grounds that people can now work from home, but it is clearly ludicrous to claim that a mobility impairment does not affect a person’s ability to work. I remind the hon. Gentleman that in responding to the Green Paper on behalf of the Opposition, his hon. Friend the Member for Faversham and Mid Kent (Helen Whately) demanded further cuts, so the outrage he has expressed is a bit inappropriate.

We have a proper plan, set out in the Green Paper. It has been well thought through—as the hon. Gentleman will find if he reads it properly—including a reference to unpaid carers on its very last page. We are well aware of the impact it will have, which is why we are consulting on the transitional arrangements.

I thank my right hon. Friend for coming before the House and calmly laying out some of the facts on this matter, as I would expect from him, given his experience. However, there has been a lot of fear out there, and confusion among MPs, advisers and—most worryingly—people who are in receipt of PIP and other benefits and are affected by these changes. Does my right hon. Friend agree that clear communications at all times about this matter are very important, and that every Minister should be very careful about clumsy and inappropriate language, because of the impact it has on the people who are most affected?

My hon. Friend is absolutely right about the sensitivity of this issue. I particularly regret the anxiety that has been caused by press speculation over the past several weeks—that has certainly been regrettable. From my postbag, the thing that particularly frightened people was the point I have already referred to, which was the previous Government’s proposal to switch PIP from a cash benefit to vouchers. That caused a great deal of concern, but my hon. Friend is right: we now need to be absolutely clear in our communication about these matters. I think the Green Paper is clear. The accessible versions of the Green Paper will all be published by the beginning of next month, and we will then have a 12-week consultation period. As a result of those versions, including the easy-read version, being available, I hope that everybody will be able to see clearly what is proposed and will be able to respond to the consultation with their views.

The analogy of the Chief Secretary to the Treasury has proved to be controversial, but the Minister agrees with the point he was making, does he not?

I did not hear what my right hon. Friend said. What I can say is that a very large number of people are dependent on the personal independence payment. We want it to be a sustainable benefit that will be there for the long term. Because of the changes we are making, which will reduce the future increase in spending on personal independence payment, we can be confident and recipients can be confident that that will be the case.

I am potentially one of the few Members of this House who has been a recipient of the higher rates of living allowance. I was a recipient of the higher rate of mobility allowance, and I relied on a Motability car for many years, too. On the flipside, I remember, after my second hip replacement in my early 30s, having to try to navigate the Access to Work scheme, which was pretty impossible. In fact, it locks people out of work, rather than letting them in.

There are many good things in the Green Paper that has been brought forward that address some of those points. When I think back to what I had to go through from age 13 to 17, I am also pleased that those benefits will be protected for people in that situation. PIP is also what we call a passporting benefit. Such things as access to the blue badge scheme and carer’s allowance are often dependent on PIP, so one potential implication is that people could be locked out. Will the Minister consider carrying these things forward and meet me to discuss access to the blue badge scheme and carer’s allowance for people who might lose PIP, but would still be entitled to those benefits?

I very much welcome my hon. Friend’s testimony to the value of the support that the system provides and the importance of maintaining that into the future. He is right about passported benefits. The availability of blue badges is not affected by anything in the Green Paper, because the mobility component of personal independence payment is not changed by any of the proposals we have made. Access to carer’s allowance, as we have said, certainly will be, and I would welcome a discussion with him about that.

I declare an interest as an honorary vice-president of Carers UK, and I sit on the board of the Fife Carers Centre. Last September, I had the Adjournment debate on support for unpaid carers. In that, the Minister for Care, the hon. Member for Aberafan Maesteg (Stephen Kinnock), promised that we would

“forge ahead together with the promise of that future in which unpaid carers are visible, valued and supported.”—[Official Report, 3 September 2024; Vol. 753, c. 288.]

That is not how unpaid carers are feeling today. The Minister referred to how the earnings limit for carer’s allowance has increased, but there is still a cliff edge. Are the Government planning to bring forward plans to link the earnings limit to the 16 hours of employment at the national minimum wage? We know that those are some of the things that caused the overpayments for carer’s allowance in the first place.

Yes, the earnings threshold will in future be set at 16 times the hourly rate of the national living wage, and that will continue indefinitely. In addition, the Chancellor announced in the Budget last year that we will look at the idea of an income taper in carer’s allowance to replace the cliff edge, which, as the hon. Member rightly says, is a feature of it at the moment. We are looking at that assessment.

I thank my right hon. Friend for how he is responding to this urgent question. The Conservatives, after 14 years in government, broke our social security system and created a hostile environment for disabled people, and therefore it is for us—Labour in government—to fix our social security system. I would like to press my right hon. Friend on this: 30% of disabled people already live in poverty, and the proposed changes to personal independence payment could see more being pushed further into poverty and many being pushed out of work. Indeed, the Government’s impact assessment highlighted that 150,000 people could lose carer’s allowance or the carer’s element. May I press him again to think about how we ensure that we support ill and disabled people as we fix the mess that the Tories have created?