Now disability benefits will be slashed by £1.2billion to help pay for new tax cuts: 640,000 who need help getting dressed set to lose Personal Independence Payments

• Cuts to Personal Independence Payments (PIP) will come in next year
• The prospect of cuts has already caused angry protests at Westminster
•  Whitehall sources insist the changes are ‘fair and sensible’
• Comes as George Osborne plans a middle-class tax giveaway

By James Slack Political Editor For The Daily Mail

The cuts to personal independence payments (PIP) will be implemented from the start of next year in an attempt to help George Osborne, pictured leaving Downing Street on Tuesday, balance the nation’s books

The disability benefits bill is to be slashed by a further £1.2billion, it emerged last night.

The cuts to Personal Independence Payments (PIP) will be implemented from the start of next year in an attempt to help George Osborne balance the nation’s books.

The timing is likely to prove controversial – with the Chancellor’s Budget next Wednesday set to include a tax giveaway for middle-class voters.

Those affected by cuts to PIP include 640,000 people who need help dressing or undressing or using the bathroom.

The prospect of PIP cuts has already caused angry protests at Westminster and follows the bitter row over the ‘bedroom tax’. But Whitehall sources insist the changes are ‘fair and sensible’ and there has been extensive consultation with disability groups. They will save £1.2billion a year by 2020/21.

The cuts will help ministers get back on track with their commitment to limit the cost of social security. The Government breached its self-imposed benefits cap last November when the Chancellor scrapped plans to make cuts to tax credits.

Mr Osborne said at the time that this would still cut £12billion from the welfare bill, but would do so ‘in a way that helps families, as we make the transition to our National Living Wage [a new higher minimum wage]’.

Earlier this week, it emerged that Mr Osborne is planning a tax giveaway for middle-class voters in the Budget. Government sources say he is set to raise the threshold at which people start paying 40p tax, following years of it being held down.

Workers currently start paying 40p tax when they earn £42,385. This is due to rise to £43,000 from April before it hits £43,300 in 2017. The Conservatives have pledged to raise it to £50,000 by 2020.

Yesterday, Work and Pensions Secretary Iain Duncan Smith appeared to take aim at the Treasury, which has based its spending plans on forecasts that have since changed. ‘We had the autumn statement in November,’ he said. ‘We were told that for the next seven years things were looking great.

‘Within one month of that forecast we are now being told things are difficult and the world is changing and therefore we have to revise that. I don’t mind that process. But if you cannot forecast more than two months, how in Heaven’s name can you forecast the next four to five years.’

He was speaking in the context of warnings by Mr Osborne and David Cameron that Britain would face an uncertain future outside the EU.

Last month, amid the worsening economic forecasts, Mr Osborne suggested he was ready to tear up his spending plans and impose billions of pounds more in cuts. He did not rule out tax rises but said now was not the time for ‘significant’ tax increases.

The AA claims the Government is planning a further increase on the tax paid by motorists in the Budget, by raising insurance premium tax (IPT). The group claims the tax could be ramped up again by three percentage points, to 12.5 per cent.

The prospect of PIP cuts has already caused angry protests at Westminster and follows the bitter row over the ‘bedroom tax’. Pictured: Protestors at a march against the 'bedroom tax' in 2013

The tax affects 7.3million car policies, 4.7million household policies, three million pet policies and three million private medical insurance policies.

In November Mr Osborne used an unexpected £27billion windfall to soften austerity and abandon billions in tax credit cuts.

Last night disability minister Justin Tomlinson said: ‘I remain committed to ensuring that we offer the most appropriate and effective support and best possible claimant experience for disabled people.’

Personal independence payments help with some of the extra costs caused by long-term ill-health or a disability, for people aged 16 to 64.

Payments range from £21.80 to £139.75 a week. The level of payment is worked out using a points system, depending on the different aids and appliances a person needs to perform basic tasks.

The cuts will be implemented by reducing the number of points given to people who need help dressing or undressing or using the bathroom.

A ‘significant’ number of the 640,000 affected will still get a reward, but it will be reduced.