Labour plans to cut £3 billion from the welfare bill could see up to 45,000 Scots lose as much as £4,681 a year, according to new figures.

The research by the House of Commons Library — commissioned by the SNP — is based on reports that Rachel Reeves will announce a shake up to the Work Capability Assessment (WCA) in tomorrow's budget. 

The Chancellor is reportedly set to announce that she will push ahead with Tory reforms to tighten up the evaluation of how a person's health or disability affects their ability to work.

The Department of Work and Pensions (DWP) has estimated that this overhauling of the qualifying criteria for benefits like Universal Credit and Employment and Support Allowance could impact around 450,000 people across the UK.

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If someone is regarded as having “limited capability for work and work-related activity” (LCWRA) then they do not need to look for work or prepare for work.

However, if they have “limited capability for work” (LCW) then the DWP expects them to be capable of work at some point in the future and to take part in a number of work-related activities, including meeting with advisers at the Jobcentre or going on training courses.

One of the changes could be around the “mobilising” assessment of the WCA, where anyone unable to move more than 50m without stopping or within a reasonable time frame due to exhaustion or discomfort is regarded as LCWRA.

According to the research by the Commons, some 42,400 Scots could be impacted by the plan.

They also estimate that another 3,300 of those currently regarded as having LCW would likely be moved to the intensive work search group.

Commenting, SNP Work and Pensions spokesperson Kirsty Blackman said: "The UK government already has a poor record when it comes to supporting the vulnerable. UK unemployment and incapacity benefits are substantially less generous than many of our European neighbours.

"Instead of making more cuts to social security, the Chancellor should be reversing the Labour government's cuts to the Winter Fuel Payment, scrapping punitive welfare cuts like the two child cap and bedroom tax, and taking action to eradicate poverty.

"There must be a U-turn and these austerity cuts must be scrapped - or the Labour Party will never be forgiven in Scotland. I urge Anas Sarwar and Scottish Labour MPs to stand up to Keir Starmer and oppose these cuts like they promised they would before it's too late."

A UK Labour source hit back at Ms Blackman. They told The Herald: “The Tories left a £22 billion blackhole in the public finances. It’s left to this Labour government to make the tough choices to fix the foundations of our economy.

“We’ll take no lessons from the SNP as they hike taxes on working Scots and waste billions.

“The Budget this week will see no return to austerity. Instead, Labour will invest in Britain’s future and protect the pay packets of working people.”

Meanwhile, Sir Keir Starmer has warned the country to expect tax rises when Ms Reeves sets out her budget.

In a speech in Birmingham, the Prime Minister insisted “better days are ahead” but that there would need to be “trade-offs”.

There would, he added, be “no shortcuts.”

However, in recent weeks, there have been questions over exactly how the party is defining “working people.”

(Image: Darren Staples) Sir Keir StarmerLast week, Sir Keir suggested those who make money from assets such as property would not meet the definition.

There is also an expectation employer national insurance could increase by at least one percentage point, while the freeze on income tax thresholds could also be extended, pulling people into paying higher rates.

The Chancellor is also thought to be looking at rises to capital gains tax and inheritance tax.

Answering questions from journalists after his speech, the Prime Minister said the working people of Britain “know exactly who they are”

They are people, he added, who “have been working harder and harder for years, just to stand still”, and who are “doing the right thing maybe still finding a little bit of money to put away”.

In his speech, Sir Keir said the government needed to run “towards the tough decisions” as “ignoring them set us on the path of decline”.

He continued: “That is our choice. Stability to prevent chaos. Borrowing that will drive long-term growth. Tax rises to prevent austerity and rebuild public services. We choose to protect working people. We choose to get the NHS back on its feet. We choose to fix the foundations reject decline and rebuild our country with investment.”

The Labour leader added: “The time is long overdue for politicians in this country to level with you honestly about the trade-offs this country faces, to stop insulting your intelligence with the chicanery of easy answers.

“Working people know that hard choices are necessary. They lived through the Liz Truss episode. They lived through the cost-of-living crisis.

“So they know that the things they want from us – protecting their living standards, building our nation, fixing our public services – they know that this can only be achieved alongside economic stability.

“There are no shortcuts.”

Asked whether he could guarantee that taxes would not rise in future budgets, he said: “I’m going to resist the temptation to say that at no point ever will there ever be an adjustment to everything else in the future.”

One of the trade-offs will be a hike to the cap on bus fares in England.

Currently, commuters south of the border pay no more than £2 for a single fare when getting the bus, but the Prime Minister has confirmed this will jump to £3 at the end of the year.

“The Tories only funded [the £2 fare cap] until the end of 2024, and therefore that is the end of the funding in relation to the £2 bus fare,” Sir Keir said.

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The Chancellor was given a telling off in the Commons yesterday, with Sir Lindsay Hoyle accusing her of acting with “supreme discourtesy” towards MPs given her “premature disclosure” of Budget details.

During a round of broadcast interviews, while attending the International Monetary Fund meeting in Washington DC, Ms Reeves confirmed she was tweaking her fiscal rules. 

Currently, the government is committed to paying for day-to-day spending through revenues, and to have debt as a share of the economy falling in the fifth year of forecasts produced by the Office for Budget Responsibility (OBR).

The speculation is that she will use public sector net financial liabilities (PSNFL) as her new benchmark for measuring government debt.

This means looking at the overall financial obligations or debt that the public sector owes, after accounting for its financial assets, including expected student loan repayments.

This could free up billions of pounds. 

Sir Lindsay, making a statement, told the Commons: “These are major new policy announcements with significant and wide-ranging implications for the Government’s fiscal policy and for the public finances.

“It is evident to me that this should therefore have been made in the first instance in this House and not to the world’s media."

The Prime Minister’s official spokesman, responding to the Commons Speaker’s criticism, told reporters: “I don’t want to comment on parliamentary matters, but it’s entirely routine for government to make announcements in the run up to budgets and spending reviews.

“But obviously we will also ensure that Parliament has all the requisite time to scrutinise measures clearly.

“The Chancellor will be in front of Parliament on Wednesday and, indeed, there will be days of Budget debate subsequently at which parliamentarians will be able to scrutinise budget measures.”