Rebel Labour MPs have reacted angrily to a leaked memo which shows the government is considering cuts to disability and sickness benefits.

The memo to the Social Security Secretary, Harriet Harman, by her chief policy adviser was given to Channel 4 News.

Harriet Harman: under fire in the Commons

It says: "A high proportion of the necessary savings will have to come from benefits paid to sick and disabled people, including compensatory benefits for industrial injury."

BBC Political Correspondent Lance Price discusses the memo

This would allow the Government "to find more cash to spend on education and health," as part of its ongoing welfare review.

The leak has fuelled the controversy over plans to cut benefits to single parents, which some Labour MPs voted against in the Commons.

One of the rebels, Ken Livingstone, told Channel 4 that no-one would object to measures that helped disabled people work.

"Disabled people want to work, like single mothers do if they get the chance. But for the vast majority of these people, work is not going to be an option."

Mr Livingstone said Labour MPs would "get hold of the whips on Monday and tell them they just won't go along with this."

MPs, alarmed by persistent rumours that benefits were in the firing line, have already warned that more cuts would cause a row that made the arguments over cutting payments to lone parents look tame.

A huge row over benefits within the Labour Party would have the potential for a public relations disaster.

Ann Clwyd: great concern among MPs

Backbencher Ann Clwyd, who voted against the government last week, claimed MPs would not go along with it.

She said: "There is great concern in the Parliamentary Labour Party. Even people who voted with the government went into the lobbies feeling very distressed. They don't want to see it happen again."

Ann Clwyd expresses her worries

The Department for Social Security refused to comment specifically on the leak or confirm its authenticity.

In a statement, it said: "We are undertaking a comprehensive review of spending, including benefits paid to sick or disabled people and their carers.

"No decisions as to what changes may follow have yet been made."

Labour MP Jeremy Corbyn predicts trouble if the cuts go ahead

The six sickness and disability benefits cost more than £16bn a year, about a quarter of total welfare spending.

The memo adds: "The Secretary of State is clear that it will not be possible to make substantial savings from the sickness and disability benefits unless Government as a whole has a coherent and convincing story to tell about its strategy towards sick and disabled people."

Blair: bills go up

In Luxembourg for the European Union summit, the Prime Minister, Tony Blair said reform of welfare remained essential.

"Or we end up in a situation where the social security bills go up and up and up and we don't have enough money to invest in our schools and our hospitals, and we have large numbers of people shut off from society's mainstream and simply living on welfare benefit without either very much good for them or very much good for the whole society," said Mr Blair.

The Social Security Minister, Baroness Hollis, puts the government's side

The Conservative Social Security spokesman, Simon Burns, said Labour planned to attack society's most vulnerable.

"This policy document looks like a cynical attempt to dig themselves out of the hole Labour now find themselves in over social security policy," he said.

"The chaos in Government over benefits will frighten many vulnerable people."

He called on Ms Harman immediately to refute the policy or admit it is part of her plans.

Liberal Democrat social security spokesman, David Rendel, said: "The Government appears to be threatening some of the most disadvantaged with even greater disadvantages.

"I don't believe there were probably more than 20 or so members of the Parliamentary Labour Party who actually thought the government were right in themselves on what they did on Wednesday."

The All-Party Disablement Group meets Ms Harman on Thursday to to discuss earlier claims the government intends to cut disability benefits.

Lord Ashley of Stoke, a Labour peer and joint chairman of the group, said: "Any proposed cuts, taxation or means testing of disability benefits are cuts for cuts' sake."

Brian Lamb, public affairs manager for Scope, the UK's largest disability organisation, said: "This latest news will only increase disabled people's anxiety about the future of the benefits they depend on.

"These leaks further damage disabled people's confidence in government proposals.

"Disabled people's basic living needs depend on adequate benefits."

The government's cross-Whitehall comprehensive spending review began in June and is expected to come up with results by June, 1998.
 
BBC Political Correspondent Lance Price discusses the memo
Ann Clwyd expresses her worries
Labour MP Jeremy Corbyn predicts trouble if the cuts go ahead
The Social Security Minister, Baroness Hollis, puts the government's side

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