For months, the Labour Government has touted its major shake up in the welfare system. This week, Liz Kendall, the Welfare Secretary, unveiled a Green Paper that sets out the details of what is planned. It is needed too, in part to reduce welfare spending by £5bn to prevent Rachel Reeves from having to hike taxes again next week. But also because welfare spending, particularly on incapacity and disability spending post COVID, has spiralled upwards leaving millions who could work excluded from the workplace.
The question is whether it is in any way likely to deliver the reduced expenditure and encourage tens if not hundreds of thousands of people stuck on benefits into the workforce.
My interest in this subject is personal. I began to lose my eyesight in my mid teens. I lived in Yugoslaia at that time and was told my only option was to weave baskets or operate a switchboard. When I moved back to the UK, I encountered that same prejudice I have also seen countless others who have some form of disability being actively discouraged from working - and a welfare system that often pays them more for doing nothing than a job on the living wage. But in my case, I managed to succeed regardless of the system and have worked in business successfully for two decades, despite my needing a guide dog from my early 20s.
For decades (can this be replaced by since XXX, decades is in the para above) , discussions about welfare reform seem to work on the assumption that those receiving disability benefits are unwilling or unable to work at all. Labour appears to be challenging that presumption but will their reforms deliver? I believe passionately that many people on these benefits dream of contributing to society, of finding purpose through employment, yet they are denied the opportunity. However, for the vast majority this almost systemic consensus, built into our benefits system steers them into long-term welfare dependency, reinforcing the message that work is out of reach.
The figures paint a stark picture. The UK currently spends a staggering £314 billion annually on welfare, a figure predicted to rise to nearly £380 billion by the end of the decade. That is unsustainable, particularly with the parlous state of UK finances. At the heart of the current system are Personal Independence Payments (PIP), which are made to those with some kind of disability or incapacity. PIP claims have surged since the pandemic with total claims having almost doubled post 2019. This increase has been seen predominantly in the younger generations, where mental health conditions such as anxiety and depression now account for 70% of PIP claims among those under 25. Meanwhile, six million Britons are on out-of-work benefits, with nearly one million assessed as being unfit for work. In some constituencies the number on benefits is truly shocking, in Central Birkenhead 51% of the population are on work benefits. This is not just a fiscal problem - it is a wasted opportunity. The current system discourages employment and stifles ambition when it should be enabling people to take control of their futures.
The major flaw with our current system is that welfare policy has historically incentivised claimants to prove what they cannot do rather than what they can. This perverse incentive must end. The Government’s newly published Green Paper on welfare reform acknowledges the need for change, but it must go further to ensure that those who can and want to work are given the support they need to transition off benefits and into meaningful employment.
The Government’s proposed “duty to engage”, requiring those on long-term benefits to participate in job-seeking or vocational training, is a step in the right direction, but it must be implemented with proper support mechanisms. A crucial aspect of the proposed reform in the Government's paper is the introduction of conditionality for PIP for those aged 16–30, ensuring young claimants are in education, employment, or volunteering to receive financial support. Such policies have been successful in the Netherlands, reducing long-term dependency and increasing workforce participation and would go a long way towards alleviating the strain the system is having on our economy while also incentivising more people on benefits payments to consider entering the workforce, or building up their skills to do so.
Another barrier to work is the Limited Capability for Work and Work-Related Activity (LCWRA) category within Universal Credit. Those placed in this group receive an extra £416 per month, yet have no obligation to seek employment. While some will always need long-term support, too many are left without any kind of pathway to work, worsening the cycle of dependency. The Government’s plan to scrap the Work Capability Assessment (WCA) is welcome, but any replacement must focus on enabling work rather than simply moving people between benefit categories.
The most pressing area for reform is the Access to Work scheme. What should be a gateway to employment for those with disabilities is instead plagued by inefficiencies, delays, and unnecessary bureaucracy. Over 55,000 applicants are currently stuck in limbo due to backlogs, preventing them from accessing the very support designed to help them secure jobs. Worse still, the scheme disproportionately benefits large public sector employers rather than small businesses and job seekers who need it most. Reforming Access to Work is key to bringing down benefit claims, not by cutting support but by making it work effectively for those who want to move into employment. This means streamlining applications, ensuring quicker processing times, and targeting funding where it will have the greatest impact.
At its core, the welfare system should not be treated as the only way for those with disabilities to survive but as a launchpad. There is no question that disability benefits must remain available for those with genuine need and without doubt a conversation needs to be had about our nation’s health. But many disabled people want to work as I did when starting out. And with the right support, they can.
Reforming the system to provide meaningful employment pathways, rather than encouraging long-term dependency, is not just an economic necessity, it is a moral imperative. The Government publishes Green Papers to create a conversation and it is safe to say a conversation has been had. The build-up to its publication has been marked by the country’s brightest all uniting under this banner, this is no longer a fringe opinion and it has been heard. For a Government determined to promote growth across the economy, this should be looked at as an opportunity. A way to boost the workforce, increase productivity and lower the cost of the benefits system in one fell swoop. The question is will the Government act or will it, like so many in the past 30 years of disability legislation, be unwilling to be bold enough to achieve its laudable goals
First published on Conservatives Home