‘Perverse' benefits system is unsustainable, warns Liz Kendall
The Work and Pensions Secretary said the Government needed to take 'urgent action' to get people into work and warned that the rise in claims for personal independence payment (Pip) was 'not sustainable'.
In a letter to Debbie Abrahams, the chairman of the Commons work and pensions select committee, Ms Kendall said: 'Reforms are needed now to make the system sustainable, while supporting those people with the greatest needs.
'Our plan to rebalance the rates in Universal Credit will remove perverse incentives that trap people in benefit dependency.'
The comments come as Ms Kendall's plans to cut personal independence payment (Pip) and the health element of universal credit face mounting criticism from Labour MPs.
Last month the MPs' committee urged Ms Kendall to delay the implementation of her reforms, citing concerns about 'the impact of the proposed cuts in universal credit health support on employment, poverty and health outcomes'. Backbenchers have also been calling for the proposals to be dropped.
Dismissing their concerns, Ms Kendall wrote: 'We urgently need welfare reform to give people a better future – to stop people from falling into inactivity, restore trust and fairness in the system.'
As it stands, those who are permanently signed off work because of sickness and claim universal credit health top up receive more than twice as much as those on the basic level of universal credit. Those signed off sick do not need to look for work, while those on basic universal credit do.
Ms Kendall and others argue that this encourages people to claim sickness benefits and puts them off trying to find work.
A report from the Resolution Foundation found that 'changes to the benefits system over the last decade have strengthened the incentive to claim incapacity and disability benefits'.
The changes to the welfare system include stricter eligibility for claiming Pip and reducing payments for new claimants of the health element of Universal Credit. They are forecast to save £5bn by 2030.
The Work and Pensions Secretary said the reforms were necessary as the current rise in Pip cases was outpacing the increase in disability prevalence.
Even after changes to disability benefits, the number of people on Pip is still forecast to grow by 750,000 by the end of the parliament, according to government estimates.
The cost of Pip is poised to rise from £15bn before the pandemic to £37bn in real terms by the end of the decade, while the overall cost of sickness and disability benefits is expected to climb to £100bn.
Pip is the main non-means-tested benefit for those with health conditions or disabilities, with payments of up to £9,500 a year to help people with living costs and getting around.
'With Pip caseload and costs forecast to continue rising, reforms are needed now to make the system sustainable, while supporting those people with the greatest needs,' said Ms Kendall.
Under plans announced in March, the Government will tighten the eligibility criteria for people to claim Pip.
A separate but linked concern are worries about the high level of unemployed young people.
The latest figures from the Office for National Statistics show that 923,000 people aged between 18 and 24 were not in employment, education or training (Neet) in between January and March 2025. There are concerns that many will find themselves stuck on benefits without help.
Alison McGovern, the employment minister, told the work and pensions committee on Wednesday: 'The situation for young people – well, it's a big worry for me at the moment.'
Ms McGovern added that the high number of Neets meant there were 'nearly one million young people effectively on the scrapheap. They need a start, they need a chance for a career'.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Guardian
14 minutes ago
- The Guardian
Parents in Britain to be granted bereavement leave after miscarriage
Parents in Britain will be granted a right to bereavement leave after suffering a miscarriage as part of Labour's workers' rights reforms, it has been confirmed. In a change to the law made via amendments to the employment rights bill, mothers and their partners will be given the legal right to at least one week's bereavement leave if they have suffered a pregnancy loss before 24 weeks' gestation. Deputy prime minister Angela Rayner has said that the change would give 'people time away from work to grieve'. Under current rules, parents are already entitled to up to two weeks of bereavement leave if they experience a stillbirth after 24 weeks of pregnancy or a child dies before they turn 18. The exact length of time off to be given to people who lose a pregnancy before 24 weeks will be specified in later legislation, following a consultation. Vicki Robinson, chief executive of the Miscarriage Association, welcomed the announcement, saying it was 'a hugely important step that acknowledges the often very significant impact of pre-24-week loss, not only for those experiencing the physical loss, but for their partners too'. The decision to extend this right to couples marks a victory for the Labour MP Sarah Owen, who has campaigned for the change. The women and equalities select committee, which Owen chairs, concluded in a report in January that the case for it was 'overwhelming'. While a number of employers already offer the leave as an extra benefit, the committee said it should become a universal right given the physical and emotional impacts of baby loss. About 250,000 expectant mothers in the UK suffer a miscarriage every year. Between 10% and 20% of pregnancies end in an early miscarriage within the first 12 weeks of gestation. Ministers have announced they will review the entire system of parental leave, declaring that the current system is 'not working' for families. They plan to investigate support for new parents, including maternity leave, paternity leave and shared arrangements. The bereavement leave changes are part of the employment rights bill, Labour's flagship workers' rights reforms in England, Wales and Scotland, which is entering its final stages in the House of Lords. Many of the new measures it entails, including lowering the earnings limit for statutory sick pay will come into effect from April next year, however the bereavement leave entitlement is part of a final wave of measures slated for introduction in 2027.
The Independent
23 minutes ago
- The Independent
Will Keir Starmer cave to pressure on the two-child benefit cap?
K's first big showdown with the Labour left in government came as a group of rebels voted for a King's Speech amendment calling for the two-child benefit cap to be scrapped. The ruthless prime minister, with the confidence of a man who had just led Labour to a landslide election win, suspended seven of his own MPs. Starmer wanted to instil fear in those who might not be on board with his agenda in the future that rebellion would have consequences. But a year on, Starmer is weakened. Labour MPs are emboldened after forcing their leader's hand over his controversial welfare cuts, and the two-child cap on benefits is likely to be next. Implemented by austerity architect George Osborne, the limit, which restricts parents from claiming certain benefits for more than two of their children, is hated across the Labour Party. Critics say the cap punishes children, with experts predicting 470,000 could be lifted from poverty if Starmer scrapped it. But how likely is it that the prime minister will give in to pressure and axe the cap? Bridget Phillipson on Sunday warned that future spending commitments – including on Labour's child poverty plans – had been made harder by the £5bn U-turn on welfare. The education secretary said ministers are 'looking at every lever and we'll continue to look at every lever to lift children out of poverty'. But, pushed on whether a change to the two-child cap was now less likely, Phillipson said: 'The decisions that have been taken in the last week do make decisions, future decisions harder.' Alternatives to scrapping the cap entirely, such as lifting it to a three-child cap, are also believed to have been floated in government. The Resolution Foundation has said increasing the two-child cap to three children could reduce child poverty by 320,000 by the next general election, costing £3.2bn per year by 2030. It said this would be 'preferable' to the current system, but that benefits should be allocated in line with need, which would require fully scrapping the two-child limit at a cost of around £4.5bn. The chancellor is already braced for tax hikes in the autumn Budget, having warned the cabinet last week they could be more painful than last year's punishing increases. And any move to scrap or alter the two-child limit would need to be paid for by more tax increases or spending cuts elsewhere. Downing Street figures have been pointing rebels demanding a change to the welfare U-turn they forced, arguing the £5bn cost of that has derailed any plans to scrap the benefit cap. But the argument has already sparked anger among left-wing MPs, with Labour's Jon Trickett saying: 'The suggestion that the Labour government will leave children in poverty because they couldn't take welfare benefits from the disabled is truly shocking.' Phillipson and work and pensions secretary Liz Kendall are currently leading a Child Poverty Taskforce, which was due to report in the spring, but has been delayed to this autumn to coincide with the Budget. The taskforce is looking at 'all the available levers we have across government' to deliver the 'ambitious' child poverty strategy promised in Labour's manifesto. Senior Labour figures have also reportedly warned that tax hikes are on the horizon after the benefits climbdown, with the chance of a change in the controversial cap looking increasingly remote. 'My assessment is that is now dead in the water,' a No 10 source told The Sunday Times. Even Starmer, who previously let it be known that he wanted to scrap the cap, ordering the Treasury to find a way to fund the plan, dampened expectations of a change last week. He said: 'I personally don't think there is a silver bullet… we have got to look at a range of things.' As long as Starmer is prime minister, he will face round after round of calls for the two-child cap to be scrapped. The question is, will he give in?
The Guardian
29 minutes ago
- The Guardian
The right to an education, health and care plan must be retained
The legal rights to an education that meets the needs of children and young people with special educational needs and disabilities (Send) are under threat. Many thousands of children risk being denied vital provision, or losing access to education altogether. As new education reforms loom, every sign from the government suggests the right to an education, health and care plan (EHCP) is to be removed from children attending mainstream schools. Local authorities want EHCPs drastically reduced, or removed altogether, to relieve them of duties they often find costly and troublesome. About 85% of children with Send are educated in mainstream settings. Over 270,000 of these children have EHCPs. These legally enforceable documents detail a child or young person's needs, and the support to enable them to fulfil their individual potential. EHCPs allow children and young people with all kinds of disabilities to receive an education. Without statutory support, underpinned by necessary extra resources for schools, it's extremely unlikely that ministers will achieve their aim of more children with Send thriving, or even surviving, in mainstream education. A reduction or complete snatching-away of EHCPs in mainstream education wouldn't mean their needs magically vanish. It would, instead, increase applications for already overcrowded special schools or mean they would be forced out of school altogether. We believe the public are on our side, and we support the newly launched Save Our Children's Rights (SOCR) campaign led by Special Needs Jungle, IPSEA and others. This campaign is calling for EHCPs to be retained, now and in the future. SOCR's recent petition reflecting this aim rapidly passed 100,000 signatures, meaning the issue will be considered for a parliamentary debate, and is still growing. For more than 40 years, children and young people with special educational needs and disabilities have had a statutory right to an education that meets their needs. Set alongside catastrophic plans to cut benefits for disabled people, this raises the question of who we are as a country and the kind of society in which we want to live. Whatever the Send system's problems, the answer is not to remove the rights of children and young people. Families cannot afford to lose these precious legal protections. Amel Alghrani Professor, school of law and social justice, University of LiverpoolElizabeth Archer CEO, PDA SocietyJane Asher President, National Autistic SocietyProf Simon Baron-Cohen Director, Autism Research Centre, Cambridge UniversityAnna Bird CEO, ContactIan Birrell Journalist and disability campaignerAlison Bloomer Editor, Learning Disability TodayCarol Boys Chief executive, Down's Syndrome AssociationLucy Bray Professor in child health literacy, Edge Hill UniversityJane Campbell Disability rights campaignerMadeleine Cassidy CEO, IPSEA (Independent Provider of Special Education Advice)Samantha Clark CEO, Learning Disability EnglandLuke Clements Cerebra professor of law and social justice, Leeds UniversityDr Mine Conkbayir Early years researcher, author and consultantJustin Cooke Head of policy and influencing, National Deaf Children's SocietyClaire Coussins Director of fundraising and engagement, KidsClaire Dorer CEO, National Association of Special SchoolsRachel Filmer Founder, Send Rights AllianceAnita Franklin Professor of childhood studies, Manchester Metropolitan UniversityCarrie Grant Broadcaster and Send parentFazilet Hadi Head of policy, Disability Rights UKJane Harris CEO, Speech and Language UKJohn Harris Journalist, writer and Send parentAngela Hassiotis Professor in intellectual disability, University College LondonBen Higgins CEO, BildCherylee Houston Actor and disability campaignerDr Rhidian Hughes CEO, Voluntary Organisations Disability GroupSarah Johnson President, PRUsAPDr Anna Kennedy Autism charity founder and campaignerJolanta Lasota CEO, Ambitious About AutismDr Tony Lloyd Former CEO, ADHD FoundationChristine McGuinness Broadcaster, campaigner and Send parentDavid Mitchell Novelist and Send parentRosa Monckton Disability and Send campaignerEmma Murphy Managing director, INFACT (Independent Fetal Anti Convulsant Trust)Chris Packham Broadcaster and neurodiversity campaignerScarlet Page Photographer and Send parentLiz Pellicano Professor of autism research, University College LondonSally Phillips Actor, campaigner and Send parentSharon Pratt Founder member, Send National CrisisTom Purser CEO, Autism ActionBrian Roberts Director of education and wellbeing, National Association for Foetal Alcohol Spectrum Disorder, and Send parentKatherine Runswick-Cole Professor and chair in education, University of SheffieldSara Ryan Professor of social care, Manchester Metropolitan UniversitySaba Salman Journalist and campaignerMelissa Simmonds Autistic campaigner and Send parentTom Shakespeare Professor of disability research, London School of Hygiene & Tropical MedicineStephanie Shirley Autism philanthropist and businesswomanCaroline Stevens CEO, National Autistic SocietyJon Sparkes CEO, MencapRachel Stevenson CEO, Reverse RettTania Tirraoro and Renata Watts Co-directors, Special Needs JungleJames Watson-O'Neill Chief executive, SenseEleanor Wright Legal officer, SOS!SENStephen Unwin Director, writer and Send parentSuzy Yardley CEO, Child Autism UKand 50 others (full list at
