Minister says no further welfare cuts planned

Stephen Crabb told MPs yesterday he has “no further plans to make welfare savings beyond the very substantial savings legislated for by Parliament”.

In a House of Commons statement yesterday, he confirmed that the Budget proposal to save £4.4bn from Personal Independence Payments (PIP) over this parliament had been dropped.

The u-turn means that there is a £4.4bn black hole, however the new minister said there would be no further cuts to welfare to cover the shortfall and that questions about how the funding will be found “ought to go to the chancellor”.

The ruling out of cuts means there is little immediate prospect of further reductions to housing benefit.

Mr Crabb also said he would review the level of the government’s welfare expenditure cap, which is set to be breached from 2016/17 to 2020/21. Iain Duncan Smith, who resigned as Work and Pensions Secretary on Friday, called the cap “arbitrary”.

The government had pledged to save £12bn on benefits by 2020.

Mr Crabb also acknowledged: “Behind every statistic there is a human being, and perhaps sometimes in government we forget that.”

Yesterday, he was facing immediate calls to re-examine plans to apply a new housing benefit cap to supported housing. The government is planning to restrict housing benefit for social tenants in line with Local Housing Allowance rates, which are used to set housing benefit for private tenants.

Rachael Byrne, director of care and support at Home Group – one of the UK’s biggest care specialist providers – wrote to Mr Crabb yesterday to warn “if we get this [the ‘LHA cap’] wrong… we will not have a functioning market for the provision of care and support”.