Today, Kemi Badenoch said that the UK is in danger of becoming a ‘welfare state with an economy attached – 28 million people in Britain are now working to pay the wages and benefits of 20 million others’.
She’s right. Changes to the system are sorely needed. In April, the OBR forecast that the cost of incapacity benefits (which are in work benefits) and disability benefits (not tied to work status or income) is set to rise to £97.7 billion, up from £66.3 billion today. That was before the Government backtracked on its minor attempts to reduce the spending. This amounts to 2.8% of GDP, up from 2.4% today. Unfortunately, her speech did not touch on the role the triple-lock plays in driving up welfare spending, and the urgent need to look at the long-term affordability of the state pension.
It’s widely accepted that the rise in working age benefits is primarily due to incentives within the welfare system, rather than skyrocketing ill health. Work and Pensions Secretary Liz Kendall herself has said that ‘the increase in disability benefits is double the rate of increasing prevalence of working age disability in the country’. That’s because of the ‘perverse financial incentives… which actively encourage people into welfare dependency’. Just yesterday, this was confirmed by Centre for Social Justice (CSJ) analysis that shows someone receiving universal credit (UC), incapacity benefits, and the Personal Independence Payment for disability (PIP) gets £2500 per year more than someone on the living wage.
It’s also true that much of this increase is due to mental health claims. The number of people receiving PIP for psychiatric disorders is 1.4m, almost double the number in 2019, with more than 400,000 getting it for mixed anxiety and depressive disorders.
The Conservative plans make a good start on this problem, and go further than many of the proposals that Labour made (and then abandoned).
Firstly, Badenoch wants to ‘draw a line in the sand’ about which conditions and people the state provides support for. While many conditions are indeed serious, that should not automatically warrant state support. Additionally, she wants to restrict access for foreign nationals – this mostly seems fair, and reflects a principle we should see more of: that most people should pay into the system before they start taking from it.
She endorsed CSJ analysis that recommended removing incapacity and disability benefits for those with less severe mental health claims and give them access to NHS Talking Therapies. This could save £7.4bn by 2029/30, according to the analysis.
Secondly, moving assessments from over the phone to in-person. Since the pandemic, most assessments for PIP and UC Incapacity have been via a phone or video call. At the Centre for Policy Studies, we found, through a FOI request, that in the year to November 2024, just 10% of UC Incapacity assessments and 5% of PIP assessments were face-to-face. Moving back to face-to-face will reduce the inflow. Reassessments were not mentioned, but these also collapsed after the pandemic and should be increased to get people off benefits they no longer to need.
She also criticised the Motability scheme, noting that 90% of cars have no adaptions made for disability. This cannot be right – surely the point of Motability is to compensate for increased costs for adapted transport, not giving out cars to everyone with a disability?
Thirdly, she described the welfare system as ideally acting like a trampoline, cushioning your fall and propelling you back to your feet. Better support for the disabled is a win-win. This needs to be fleshed out and should be a major focus of Conservative policy-making in the coming years. Often, job centres focus on ticking boxes for eligibility, rather than investing in evidence-based interventions that will move people into work. It’s an obvious area for reform, where more authority and funding – linked to appropriate incentives – could be given to job centres and local authorities to design or choose employment programmes that will be successful.
All in all, it was a sensible speech aimed at tackling some of the biggest problems in the welfare system. There’s a lot of work that needs to done to develop some of the solutions. But many of the principles are sound. She has acknowledged that the welfare system is unaffordable, that work pays, and that the system should compensate you for the real costs of your disability, rather than for just having a disability.
This last point is crucial – welfare reform should not be about denying the reality and lived experience of those with illness, especially mental illness. Rather, it must focus on what is in a person’s long-term interests, and compensating those with disabilities for the actual additional costs of those disabilities, not for just having them.
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