Loyalists rebel over plan to cut disabled benefits

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LOYALIST LABOUR MPs rebelled yesterday over the Government's controversial plans to cut benefit payments to some disabled people.

In the first public revolt over the Welfare Reform Bill, 11 Labour MPs tabled a Commons motion demanding a U-turn over its proposal to reduce incapacity benefit payments for disabled people who also have private pensions.

Although the first pounds 50 a week of a pension will not be means-tested, disabled people receiving more than that will lose 50p of every pounds 1 they are paid in incapacity benefit.

The Disability Benefits Consortium said yesterday it was "dismayed" that means-testing was being introduced for a benefit to which people had contributed through their National Insurance payments.

The group warned that disabled people who had made provision for their own retirement "are likely to feel deeply betrayed when they discover that they are to be penalised for doing this".

The Commons motion, tabled by Jim Cunningham, Labour MP for Coventry South, welcomed the Government's welfare reform programme but "noted" the concerns among pressure groups about the effects on the "genuinely disabled."

It called on ministers to bring in " a more generous set of arrangements for those recipients of incapacity benefit who draw upon occupational pensions".

The protest will be taken seriously by the Government because the 11 rebels are not among the "usual left-wing suspects" who have criticised the welfare reforms.

It raises the prospect of substantial rebellion during the Bill's passage through Parliament which could force Alistair Darling, the Secretary of State for Social Security, to think again.

Mr Darling argues that the number of disabled people with private pensions has increased sharply in recent years. But the rebels insist this trend was already taken into account when the previous Conservative government replaced invalidity benefit with the present less generous scheme.

As well as tabling amendments to the cuts in incapacity benefit, the rebels hope to win changes to government plans to restrict widows' benefits.

Iain Duncan Smith, the Tory spokesman on social security, said: "The Government is wrong to penalise people who have made provision for their own retirement. Pensioners need to be aware that ministers cannot be trusted."

Mr Darling believes reform is needed because invalidity benefit has become a form of early retirement. But the Disability Alliance said yesterday: "We do not think there is anything wrong in principle with people taking early retirement on medical or disability grounds."