Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will make an assessment with the Secretary of State for Work and Pensions of the potential impact of increasing cost-of-living support for disabled people on the wider economy.

The Government understands that increased costs of essentials such as energy and food are causing worries and hardship for many people, including disabled people. We are deeply committed to addressing these concerns.

Certain benefits available to support disabled people, such as the Personal Independence Payment, which is designed to help people with the extra costs of their disability or health condition, will increase fully by inflation in 2025-26 – an increase of 1.7% (September CPI) from April 2025. This will help many people with disabilities to manage cost-of-living pressures.

The Government recognises that not everyone can work and is committed to supporting those who are unable to work through the benefit system. However, where people can work, the Government has introduced a range of policies which help disabled people interact with, and return to, the labour market. Supporting people into good quality work will not only improve living standards but is vital in managing fiscal pressures and boosting the wider economy.

The Government updated the remit of the Low Pay Commission (LPC) so that, for the first time, the LPC were asked to consider the cost of living when recommending a National Living Wage (NLW) rate. From 1 April 2025, the NLW will increase by 6.7% to £12.21 per hour. This represents an increase of £1,400 to the gross annual earnings of a full-time worker on the NLW and is expected to benefit over 3 million low-paid workers. Those with a disability are among those more likely to benefit from these increases.

In November the Government also published the ‘Get Britain Working’ White Paper, which set out the Government’s strategy to reduce economic inactivity and help people with long-term health conditions start or stay in work. This includes a new Connect to Work programme providing £115 million in funding next year to local areas in England and Wales to deliver new back-to-work support for people who are economically inactive. Over 4 years, the OBR judge it will expand the labour market by 25,000 people.