With self-imposed fiscal rules leaving it little room for manoeuvre, the government has made its choice: no to more borrowing, tax rises or the wealth tax suggested by some of its own MPs – and yes to cutting disability benefits. Speaking in the House of Commons, Liz Kendall, the work and pensions secretary, did her best to talk up the £1bn funding she has secured to help people back into work. But the bleak reality is that £5bn of cuts to disability and incapacity benefits are expected to leave up to 1 million people worse off. Dress it up as they might – by blaming the Tories for everything that has gone wrong with the system, and warning that the trajectory of rising claims is unsustainable – this is a wrong and cruel decision that ministers should live to regret.

A possible freeze in the level of personal independence payments (Pips) paid to disabled people was dropped after protests. A means test has also not materialised, so the entitlement remains universal. But the criteria for claims are being tightened, at the same time as a separate assessment process for the health element of universal credit is scrapped. For those who don’t meet the new Pip criteria, there could be a £3,500 annual loss of income from next year (more details will come from the Office for Budget Responsibility). For many thousands of vulnerable households, this will be a life-changing loss of income.

The health top-up of universal credit is being frozen rather than cut for current recipients, meaning there will be no sudden drop. But the prospects for new claimants are grim: the new annual rate will be £2,444 lower – unless resistance from MPs and campaigners leads to changes, as it should. Since claimants are concentrated in poorer areas, these cuts can be expected to exacerbate regional inequalities and increase hardship, including hunger, in places that are already depressed.

There is no doubt that the benefits system is flawed, and reform is needed. The decision to raise the basic rate of universal credit, and reduce the gap with the amount paid to those unable to work, is overdue and welcome. In time, this rebalancing may contribute to improving claimants’ health, which many experts believe has been adversely affected by existing incentives – particularly the Tories’ removal of support from those preparing for work, which penalised those who were less seriously ill or getting better.

Ministers are right to be concerned that the number of people who are too ill to work has continued to rise since the pandemic, when in other countries it fell back. The new “right to try” a job without losing benefits is a positive step. So is the commitment to protect those with the most severe disabilities. But such measures, and even the £1bn employment support package, are dwarfed by the cuts. The overall impression is of a secretary of state who had the rug pulled from under her by the Treasury’s demand for savings.

These are the wrong choices, and the government’s efforts to sell them are making matters worse. Alarmist rhetoric about the unaffordable burden on taxpayers scapegoats claimants and damages society. Although health-related claims have risen, the overall share of national income spent on social security has been stable. It is shameful for a Labour government to place a higher value on fiscal rules, and commitments not to raise taxes, than on the needs of disabled people. Campaigners must keep fighting.

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