Paul Johnson, the former head of the Institute for Fiscal Studies, has triggered anger after calling for a crackdown on Personal Independence Payments (PIP). He said Andy Burnham and Chancellor John Healey must get a grip on the rapidly rising welfare bill.
Mr Johnson suggested that tightening the criteria for PIP should be considered as one way of reducing spending. But his intervention has triggered a furious response online, with critics accusing him of failing to understand the purpose of PIP and attacking disabled people.
Critics accuse economist of 'punching down'
One commenter said the proposal amounted to an attempt to hurt people who need the most support. Another claimed that critics of PIP were confusing the benefit with payments specifically designed for people who are out of work.
Others questioned why Mr Johnson's status as a leading economist should give him particular influence over decisions about welfare. One critic warned that reducing PIP could have knock-on consequences for carers, while another argued that the Government should look at alternatives to benefit cuts, including changes to taxation and a universal basic income.
Rising cost of health-related benefits
Mr Johnson, who led the IFS for 14 years until 2025, said the Government needed to address what he described as an "extraordinary increase" in people receiving health-related benefits. The bill for working-age sickness and disability benefits has risen from £36billion in 2020 to £58billion today, with the Office for Budget Responsibility forecasting it could reach £78billion by 2030.
The number of people receiving PIP in England and Wales has also increased, from 3.6million when Labour came to power in 2024 to around four million today.
PIP and mental health claims
PIP is designed to help people with the additional costs associated with a long-term physical or mental health condition or disability. It is not an out-of-work benefit and can be paid to people who are working.
Mr Johnson said there had been a significant change in the pattern of claims since the Covid pandemic, with a growing proportion relating to mental health and neurodevelopmental conditions including anxiety and ADHD. The share of such claims has risen from 16.5 per cent in 2020 to 24 per cent this year, according to figures cited in his interview. Mr Johnson said that PIP had "never been designed to support such a large number of people with mental health conditions of one kind or another", reports the i paper.
He also highlighted the more severe incapacity element of Universal Credit, where claimants can be exempt from requirements to look for work. He argued that the welfare system could create "perverse incentives", because people receiving health-related benefits can receive more money and avoid some of the requirements imposed on unemployed people seeking work.
"The standard unemployment bit of universal credit is incredibly mean, very hard to live on," he said. "So if you can get on to these health-related benefits, my goodness, there's a very good case for doing it."
Timms Review plans to change PIP
Mr Johnson's intervention comes as the Government prepares for the next stage of a major review of PIP led by Sir Stephen Timms, the Minister for Social Security and Disability. The Timms Review was launched to examine whether PIP is fair and fit for the future, and is the first comprehensive review of the benefit since it was introduced in 2013.
Its interim report, published in July, concluded that PIP is "not fit for purpose" and needs fundamental change. But importantly, the interim review did not recommend simply cutting PIP or reducing its spending.
Instead, it set out evidence gathered so far and said the steering group would develop its final recommendations for the Government in the autumn. The review received 38,713 responses during its call for evidence, from disabled people, people with long-term health conditions, carers, charities, clinicians, academics and other organisations.
It found that PIP is widely valued as a benefit, with many disabled people saying it is vital in helping them meet the extra costs of disability and live independently. But it also uncovered deep dissatisfaction with the way the system operates.
More than 90% of responses expressing views about the PIP process were negative, with people raising concerns about applications, assessments, decision-making and reassessments. People with fluctuating, multiple or less visible conditions were among those who raised concerns about whether the assessment process properly captures the reality of their lives.
The review also highlighted the wider importance of a PIP award. Entitlement can act as a passport to other support, including Carer's Allowance and certain local authority and Government benefits, as well as schemes such as the Blue Badge.
This means a decision not to award PIP can have consequences beyond the loss of the payment itself. The review's findings therefore provide ammunition for those demanding reform of PIP — but do not amount to an endorsement of Johnson's call for tighter eligibility.
Indeed, the review's steering group has said it needs to consider how to balance fairness, independent living and the sustainability of the system within fixed financial limits. The Government has continued gathering evidence ahead of the final recommendations.
In August, disabled people and people with long-term health conditions were invited to take part in workshops intended to help shape those recommendations. The final report is due to be presented to the Work and Pensions Secretary in the autumn.
Pressure to cut the welfare bill
Mr Johnson said the Government could not simply allow health-related benefit spending to continue rising. He said the Treasury may also need to raise taxes in October's Budget, with capital gains tax among the options.
He suggested an increase in capital gains tax could raise a small number of billions of pounds, although he argued it should form part of wider reform. He also called for stamp duty to be abolished or significantly reduced, describing it as a "disastrously damaging" tax.
His comments come as the Government faces mounting pressure over the public finances and the rapidly rising cost of sickness and disability benefits. But the fierce reaction to his PIP proposals shows just how politically explosive any attempt to reduce disability payments could become.
Critics online accused the economist of "punching down", questioned his credentials and argued that disabled people should not bear the burden of efforts to balance the nation's finances. Others insisted that PIP is intended to meet the additional costs of disability and pointed out that many recipients are already in work.
