The Labour Government’s recent proposals to slash Personal Independence Payment (PIP) and other disability benefits have sparked outrage, particularly in my home city of Liverpool. Framed as a necessary reform to curb a ballooning welfare bill and boost economic growth, the idea, we are told, is to incentivise work and reduce economic inactivity. But, as a liberal who believes in a compassionate society, I know that this approach is fundamentally flawed. Far from driving economic prosperity, these cuts risk undermining the very foundations of growth — human potential, social stability and fairness.
Let’s start with the problem the Government seeks to address: the welfare bill. This is projected to exceed £100 billion by the end of the decade, driven by rising claims. With an ageing population, increasing mental health challenges and NHS waiting lists at record levels, it is clear the current system is creaking. The Government’s ambition to achieve an 80% employment rate and kickstart growth is making the right noises. But slashing disability benefits is not the answer — it’s a blunt tool that ignores the complexities of disability and the realities of the labour market.
Personal Independence Payment (PIP) is not an unemployment benefit. It is a non-means-tested payment designed to help people with disabilities cover the extra costs of daily living, whether they work or not. For many, it actually helps them to become part of the workforce. The Government’s plan to tighten eligibility, requiring a minimum score of four points in a single daily living activity from November 2026, will exclude around 800,000 current and future claimants, according to the Office for Budget Responsibility. Freezing payments for existing recipients and halving incapacity top-ups for new Universal Credit claimants further squeezes those already stretched thin.
The economic logic here is shaky at best. The Government assumes that reducing financial support will push disabled people into work, thereby boosting productivity and tax revenues. Yet this overlooks a critical reality: many PIP recipients want to work but face structural barriers: inaccessible workplaces, inflexible employers or a lack of tailored support. Scope, the disability charity, estimates that disabled households need an extra £1,010 per month to match the living standards of their non-disabled peers. Cutting PIP does not bridge that gap; it widens it, potentially trapping people in poverty rather than propelling them into employment.
Moreover, the economic benefits of these cuts are overstated. The knock-on costs such as the increased pressure on the NHS, mental health services and local authorities could easily offset anticipated savings. When people lose the support they need to manage their conditions, their health often deteriorates, making work less likely, not more. This is not a recipe for growth: it is a false economy.
Beyond economics, there is also a moral dimension that we cannot ignore. A society’s moral strength lies in how it treats its most vulnerable. PIP is not a luxury, it is a lifeline for millions. Tightening eligibility risks excluding those with mental health conditions or less visible disabilities who may not score highly on a single metric but still face significant daily challenges.
The Liberal Democrats have long championed fairness and opportunity. Our preamble states that nobody should be enslaved by poverty, ignorance or conformity. Our General Election manifesto pledged to protect and enhance disability support, rejecting cuts in favour of empowerment. My party would reverse the PIP eligibility tightening, ensuring assessments reflect the full spectrum of disability — physical and mental.
The Labour Government have got their priorities all wrong. So, what would a liberal priority be? What would my priority be?
Prevention.
Too often the UK is reacting to events rather than putting the proactive policies of the future into action now. This should include slashing NHS waiting lists with a £5 billion package to recruit 8,000 more GPs and expand community care, enabling more disabled people to work sustainably; as well as investing in preventive health measures and mental health support for young people as part of a wider plan to fix social care and to get more people back into the workplace.
“That’s all well and good, Carl, but where do you get the money from?” I hear you, and here is the answer — a smart investment now will save money further down the road. More importantly, we do this by boosting tax revenues, particularly from the big tech giants. The Lib Dems would triple the tax on big tech giants who have got a lot to answer for when it comes to the mental health of our young people.
Bright Blue’s vision — a dynamic, fair economy — offers another good, well-thought-through vision. Expand employment support beyond £1 billion, fund workplace adaptations, subsidise flexible jobs and enforce disability-friendly hiring. Reform welfare to reward work without slashing support — link PIP to inflation, taper benefits for job transitions and target savings elsewhere, like tax evasion. Tackle inactivity’s causes, cut NHS waiting lists and bolster mental health services. These steps echo the Lib Dem focus on empowerment.
Growth thrives when people are equipped to contribute, not stripped of support. The Labour Governments austerity will do the latter, stripping away vital support from the most vulnerable. The Lib Dem alternative? Investing in people, not penalising them, unlocks potential. As liberals, we must reject this blunt approach and champion a system that marries fiscal sense with human dignity. The UK’s challenges demand bold solutions. Cutting PIP isn’t one. It’s time for a rethink that builds an economy for all.
Cllr Carl Cashman is the Leader of the Liberal Democrats in Liverpool and an Associate Fellow of Bright Blue. The views expressed in this article do not necessarily reflect the views of Bright Blue.