PARLIAMENTARY DEBATE
Welfare Reform - 18 March 2025 (Commons/Commons Chamber)
Debate Detail
The facts speak for themselves. One in 10 people of working age are now claiming a sickness or disability benefit. Almost 1 million young people are not in education, employment or training—one in eight of all our young people. Some 2.8 million are out of work due to long-term sickness, and the number of people claiming personal independence payments is set to double this decade from 2 million to 4.3 million, with the growth in claims rising faster among young people and those with mental health conditions. Claims are up to four times higher in parts of the midlands, Wales and the north where economic demand is weakest. These places were decimated in the ’80s and ’90s, written off for years by successive Tory Governments and never given the chances that they deserved.
The consequences of that failure are there for all to see. Millions of people who could work are trapped on benefits, denied the income, hope, dignity and self-respect that we know that good work brings. Taxpayers are paying millions more for the cost of failure, with spending on working-age sickness and disability benefits up £20 billion since the pandemic, and set to rise by a further £18 billion by the end of this Parliament to £70 billion a year. It is not like this in most other comparable countries, where spending on these benefits since the pandemic is either stable or falling, while ours continues to inexorably rise. That is the legacy of 14 years of Tory failure.
Today, we say, “No more”. Since we were elected we have hit the ground running to get more people into good work through our plan for change. We are investing an extra £26 billion into the NHS to drive down waiting lists and get people back to health and back to work.
We are improving the quality of work and making work pay with our landmark employment rights legislation and increases in the national living wage; we are creating more good jobs in every part of the country in clean energy and through our modern industrial strategy; and we are introducing the biggest reforms to employment support in a generation, with our £240 million Get Britain Working plan. Today, our pathways to work Green Paper sets out decisive action to fix the broken benefits system, creating a more proactive, pro-work system for those who can work and so protecting those who cannot work, now and for the long term.
As a constituency MP for 14 years, I know that there will always be people who can never work because of the severity of their disability or illness. Under this Government, the social security system will always be there for people in genuine need. That is a principle we will never compromise on. Disabled people and people with health conditions who can work, however, should have the same rights, choices and chances to work as everybody else. That principle of equality is vital too, because, far from what Conservative Members would have us believe, many sick and disabled people want to work, with the right help and support. Unlike the Conservatives, that is what we will deliver.
Our first aim is to secure a decisive shift towards prevention and early intervention. Almost 4 million people are in work with a work-limiting health condition and around 300,000 fall out of work every year. We have to do far more to help people stay in work and get back to work quickly, because their chances of returning are five times higher in the first year. Our plans to give statutory sick pay to 1 million of the lowest-paid workers and provide more rights to flexible working will help keep more people in work. The WorkWell programme is trialling new approaches, such as GPs referring people to employment advisers instead of signing them off sick. Our Keep Britain Working review, led by former John Lewis boss Sir Charlie Mayfield, will set out what Government and employers can do together to create healthier, more inclusive workplaces. We will therefore help more employers to offer opportunities for disabled people, including through measures such as reasonable readjustments, alongside our Green Paper consultation on reforming Access to Work so it is fit for the future.
Today, I can announce another step. Our Green Paper will consult on a major reform of contributory benefits, merging contributions-based jobseeker’s allowance and employment support allowance into a new time-limited unemployment insurance paid at a higher rate, without someone having to prove that they cannot work in order to get it. Therefore, if someone has paid into the system, they will get stronger income protection while we help them get back on track.
Our second objective is to restore trust and fairness in the benefits system by fixing the broken assessment process and tackling the perverse incentives that drive people into welfare dependency. Labour Members have long argued that the work capability assessment is not fit for purpose. Going through the WCA is complex, time-consuming and often stressful for claimants, especially if they also have to go through the PIP assessment. More fundamentally, it is based on a binary can-or-cannot-work divide, when we know that the truth is that many people’s physical and mental health conditions fluctuate. The consultation on the Conservatives’ discredited WCA proposals was ruled unlawful by the courts. I can therefore announce today that we will not go ahead with their proposals. Instead, we will scrap the WCA in 2028.
In future, extra financial support for health conditions in universal credit will be available solely through the PIP assessment. Extra income is therefore based on the impact of someone’s health condition or disability and not on their capacity to work, reducing the number of assessments that people have to go through and providing a vital step towards derisking work. And we will do more, by legislating for a right to try, guaranteeing that work in and of itself will never lead to a benefit reassessment and giving people the confidence to take the plunge and try work without the fear that that will put their benefits at risk.
We will also tackle the perverse financial incentives that the Tories created, which actively encourage people into welfare dependency. They ran down the value of the universal credit standard allowance. As a result, the health top-up is now worth double the standard allowance, at more than £400 a month. In 2017, they took away extra financial help for the group of people who could prepare for work, so we are left with a binary assessment of whether people can or cannot work, and there is a clear financial incentive for someone to define themselves as incapable of work—a factor the Office for Budget Responsibility, the Institute for Fiscal Studies and others say is likely to be driving people on to incapacity benefits. Today, we tackle this problem head-on.
We will legislate to rebalance the payments in universal credit from April next year, fixing the value of the health top-up in cash terms for existing claimants and reducing it for new claimants, with an additional premium for people with severe, lifelong conditions that mean they will never work, to give them the financial security they deserve. Alongside that, we will bring in a permanent, above-inflation rise to the standard allowance in universal credit for the first time ever. This means a £775 annual increase in cash terms by 2029-30, and it is a decisive step to tackle the perverse incentives in the system.
We will also fix the failing system of reassessments. The Conservatives failed to switch reassessments back on after the pandemic, so they are now down by more than two thirds, and face-to-face assessments have gone from seven in 10 to only one in 10. We will turn these reassessments back on at scale, shift the focus back to doing more face-to-face, and ensure that they are recorded as standard, to give confidence to claimants and taxpayers that they are being done properly.
I can also announce that, for people on universal credit with the most severe disabilities and health conditions that will never improve, we want to ensure that they are never reassessed, in order to give them the confidence and dignity they deserve. We will also fundamentally overhaul the Department for Work and Pensions’ safeguarding approach to make sure that all our processes and training are of the highest quality, so that we protect and support the most vulnerable people.
Alongside these changes we will also reform disability benefits so that they focus support on those in greatest need and ensure that the social security system lasts for the long term into the future. Social and demographic change means that more people are now living with a disability, but the increase in disability benefits is double the rate of increasing prevalence of working-age disability in the country: claims among young people are up 150%; claims for mental health conditions are up 190%; and claims for learning difficulties are up by over 400%, according to the IFS. Every day there are more than 1,000 new PIP awards. That is the equivalent of adding a population the size of Leicester every single year.
That is not sustainable in the long term, above all for the people who depend on that support, but the Tories had no proper plan to deal with it—just yet more ill-thought-through consultations. So today I can announce that this Government will not bring in the Tory proposals for vouchers, because disabled people should have choice and control over their lives. We will not means-test PIP, because disabled people deserve extra support, whatever their incomes, and I can confirm that we will not freeze PIP either. Instead, our reforms will focus support on those with the greatest needs. We will legislate for a change in PIP so that people will need to score a minimum of four points in at least one activity to qualify for the daily living element of PIP from November 2026. That will not affect the mobility component of PIP and relates only to the daily living element.
Alongside that, we will launch a review of the PIP assessment, led by my right hon. Friend the Minister for Social Security and Disability, in close consultation with disabled people, the organisations that represent them and other experts, so that we can ensure that PIP and the assessment process are fit for purpose now and into the future. This significant reform package is expected to save over £5 billion in 2029-30; the OBR will set out its final assessment of the costings next week.
Our third and final objective is to deliver personalised support to sick and disabled people who can work so that they can get the jobs they need and deserve. We know from the last Labour Government’s new deal for disabled people, young people and the long-term unemployed the difference that proper employment support can make. More recent evidence from the Work Choice programme and additional work coach time shows that support can make a significant difference in the number of people getting and keeping work and improving their mental health and wellbeing.
This Labour Government believe that an active state can transform people’s lives. We know that because we have done it before. Today I can announce that we will invest an additional £1 billion a year in employment support, with the aim of guaranteeing high-quality, tailored and personalised support to help people on a pathway to work—the largest ever investment in opportunities to work for sick and disabled people. Alongside that, for those on the UC health top-up, we will bring in an expectation to engage and a new support conversation to talk about people’s goals and aspirations, combined with an offer of personalised health, skills and employment support.
We will go further, because being out of work or training is so damaging for young people’s future prospects. In addition to funding our youth guarantee through the £240 million Get Britain Working plan, we will consult on delaying access to the health top-up in universal credit until someone is aged 22, reinvesting the savings into work support and training opportunities, so that every young person is earning or learning and on a pathway to success.
The Conservatives left a broken benefits system that is failing the people who depend on it and our country as a whole. The status quo is unacceptable, but it is not inevitable. We were elected on a mandate for change to end the sticking-plaster approach and tackle the root causes of problems in this country, which have been ignored for too long. We believe in the value and potential of every single person: we all have something positive to contribute and can make a difference, whether that is in paid work, in our families or in our communities alongside our neighbours and friends. We will unleash potential in every corner of the land, because we are as ambitious for the British people as they are for themselves. Today we take decisive action, and I commend this statement to the House.
This is not just a question of money. We have 3 million people of working-age who are not in work due to ill health, not filling the roles businesses need, not contributing to our economy and not fulfilling their own potential. The best way to get the welfare bill down is to get people off benefits and into work. That is what we did year after year after taking office in 2010. Despite the once-in-a-century pandemic, 4 million more people were in employment when we left office than when we inherited Labour’s mess. Before the pandemic, economic inactivity was at an historic low, but it is true that we then started to see a new phenomenon: growing numbers of people, and—particularly worryingly—young people, claiming sickness benefits. A system set up with good intentions to protect the most vulnerable in society has over time morphed into something broader, driven in part by a well-intentioned but not always helpful medicalisation of life’s ups and downs.
In government, we identified the problem and worked up plans to tackle it, but at every point Labour Members opposed them. In fact, the now Chancellor said that not one single penny could be saved from benefits. When they came into office, not only did they cancel or delay pretty much everything we handed over, but they had no plans of their own. They walked into the Department with empty notebooks. All they had done in opposition was oppose, instead of the hard work of coming up with their own answers. That is why the country has had to wait another eight months for this announcement. In that time, taxpayers have shelled out £7 billion in extra sickness benefits, and nearly half a million people have been signed off sick. In fact, 60 people were signed on to sickness benefits while the Secretary of State was talking.
None the less, I have been looking forward to hearing what the right hon. Lady would announce today and which of the many things briefed to the media her spinning policy wheel would eventually land on. Governing is hard—we know that. In the last few weeks, the Government have made it look really hard, but that is nothing compared with how hard life can be for a severely disabled person, somebody for whom getting up, getting dressed and getting breakfast—things most of us found easy this morning—are hard if not impossible. For some people, the last few weeks have been deeply frightening. They will be glad of the uncertainty finally ending.
I genuinely want the right hon. Lady to succeed, and I welcome her commitment today to increasing the number of reassessments and to having more of them face to face and recorded. I welcome the investment in employment support for disabled people. I welcome, of course, her reannouncing a host of things that we were doing in government. Scrapping the work capability assessment and creating a single assessment is already Government policy that is due to come in in 2026-27. Her big idea seems to be to delay that until 2028. Merging new-style jobseeker’s allowance and employment and support allowance into a new time-limited higher rate is a proposal that we worked up in government. We launched a consultation on tightening up eligibility for PIP and, by the way, we would have gone much further with that. We consulted on ending reassessments for people whose health conditions will not improve, and the right to try guarantee sounds remarkably similar to our chance to work guarantee. Of course, on the Secretary of State’s continued support for WorkWell, I launched that programme with the now shadow Chancellor, my right hon. Friend the Member for Central Devon (Mel Stride). In fact, the only original idea I can see in the entire announcement is increasing the rate of unemployment benefits—a Labour policy if ever I have heard one.
This is a now-or-never chance to seize the moment—a now or never for millions of people who will otherwise be signed off for what could end up being a lifetime on benefits—but today’s announcement leaves me with more questions than answers. How many people will be helped back into work and by when? Surely we have not been waiting eight months for just another Green Paper. Where is the fit note reform crucial to stem the flow of people on to benefits? Where is the action on people being signed off sick for the everyday ups and downs of life? Why is the right hon. Lady planning to save only £5 billion when the bill is forecast to rise to over £100 billion? Do the savings she is announcing today include the £5 billion we had already agreed with the OBR for reforming the work capability assessment? If so, she has made virtually no savings of her own. What is the net saving given the additional expenditure planned?
Fundamentally, this is too little, too late. The fact is that £5 billion just does not cut it with a bill so big going up so fast. She needed to be tougher. She should be saying, “No more hard-working taxpayers funding the family next-door not to work, no free top-of-the-range cars for people who do not need them, no more sickfluencers helping people to claim money they do not need.”
Before the right hon. Lady puts on her angry voice and leans across the Dispatch Box to shout at me about “14 years”, I gently say to her that everybody in this Chamber and around the country knows that we lost and Labour won. Her job now is to govern and mine is to hold her to account. Our country needs everybody who can work to do so. That principle should be at the heart of our welfare system. It is good for the taxpayer, good for the economy and good for the individual and their family, who benefit from security, dignity and purpose that work brings, and it means that those who genuinely cannot work get the support that they deserve.
The fact is that fewer people work under Labour. That has happened every time Labour has been in office, and it is already happening now. The Government should have taken their time in opposition to come up with meaningful reforms, but they did not, and the country is already paying the price.
I am not interested in being tough. This is about real people with real lives, and we must be careful in how we talk about it. I am interested in taking the right steps to change the system in order to transform people’s lives and, crucially, ensure that we have a social security system that lasts. One in three of us will have a health condition in our lifetime, and one in four is disabled. Unless the country, the welfare state, the world of work and all our public services wake up to that fact, the welfare state that the Labour party created will not be there for future generations. That is what we are determined to secure. This is a substantial package of measures that will save around £5 billion by 2029-30. We will have to wait until the OBR comes up with its final costings on all this at the spring statement.
I leave hon. Members with this: a decade ago, former Chancellor George Osborne said:
“Governments…let…unemployed people get parked on disability benefits, and told they’d never work again. Why? Because people on disability benefits don’t get counted in unemployment figures that could embarrass politicians.”
The Labour party is not embarrassed about this situation; we are ashamed of the state the Tories left the country in. We will face up to our responsibilities; it is time that Conservative Members did the same.
I appreciate the difficult financial circumstances that we face. Despite the Opposition’s assertion that £5 billion is not a huge figure, this is the largest cut in social security support since 2015. There are alternative and more compassionate ways to balance the books, rather than on the backs of disabled people. I absolutely and fundamentally believe that my right hon. Friend is on the right course, but I implore my party to try to bed in our reforms before we make the cuts, as others have asked.
There is so much evidence of the adverse effects that the Conservative party had through cuts to support and restrictions to eligibility criteria when it was in government, including the deaths of vulnerable people. That cannot be repeated. I would be grateful if my right hon. Friend published as a matter of urgency the Government’s analysis of the impacts, particularly mental health impacts, and outlined when we are expected to respond.
The Liberal Democrats want to see more people in work, including those with disabilities. Sadly, the significant blocker to those people getting into work is the appalling state of the health and social care system left behind by the Tories—to my mind, in more ways than one. We desperately need the new Labour Government to drive forward with reforms to invest in and improve our health service.
The devil is in the detail of these proposals. I fear what we will find as we turn over rocks over the next few days, particularly for the most vulnerable. The Secretary of State has described the system as broken, so how will she drive significant change through the measures? I fear that this is just tinkering around the edges when we need real culture change within the DWP and investment in our NHS. That is absolutely essential.
We need a decisive cultural shift in the DWP. That is why our Get Britain Working plans include proposals to overhaul jobcentres. We have also said today that we need to look fundamentally at our safeguarding approach. Our Pathways to Work programme is genuinely just that. For some people, getting out of the house is an achievement; for others, it is maybe going along to a community group, doing voluntary action or getting skills. That is what we mean, and we will work closely not only with the NHS and social care—and my right hon. Friend the Secretary of State for Health and Social Care—but with voluntary organisations, which have such a vital role in helping people on to a pathway to success.
Given the size and complexity of the social security system, it is not easy for me to provide an answer now for the people whom the hon. Gentleman has mentioned. That is why we must have those personal assessments, and I want much more to be done to ensure that they are carried out properly.
Disabled people’s trust in the system is low following 14 years of a failed punitive approach by the Conservative party, and speculation in recent days has left my constituents feeling fearful. What assurances can the Secretary of State give that those with the most severe disabilities—those who are genuinely unable to work—will be no worse off under these plans?
I say to the House, and to you, Madame Deputy Speaker, that I know many people would have wanted to ask more questions and to say more, but my door is always open. We want and need to get this right, and we will have more debates about this, but if any hon. Member on either side of the House wants to contact me with more questions, I and the team will do everything we can to address those openly, honestly and quickly.
We absolutely will protect those with severe disabilities who can never work. I do not want to see them having to go through deeply worrying reassessments, and we want to put that right. For people in Harlow who can work but have been denied such opportunities, we will fix the broken system, tackle the perverse incentives left us by the Conservatives, and give people the hope and opportunity that there are better days ahead.
“Needs supervision…or assistance to be able to manage therapy that takes…3.5 hours a week. 2 points… Needs assistance to be able to wash either their hair or body below the waist. 2 points… Needs assistance to be able to get in or out of a bath…3 points … Needs supervision…to be able to manage toilet needs. 2 points… Needs assistance to be able to dress or undress their lower body”—
needing the physical help of another person—also
“2 points.”
At the moment, someone with all of those needs would qualify for this component of PIP, but under her new rules they will not. How can I give the Secretary of State the opportunity to correct the record?
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