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4 hours ago
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Labour’s plans for social security are once again under the spotlight, after the high court ruled that a consultation on incapacity benefit cuts was unlawful. Coupled with an expected squeeze on departmental spending, and the latest warning from a House of Lords committee that the present system is “unsustainable”, the prospect of a new consultation ramps up the pressure on the work and pensions secretary, Liz Kendall, to come up with a policy to match her rhetoric.
Ms Kendall rejects the language of her Conservative opponents – for example, the claim by Mel Stride, her predecessor, that people were being signed off work by doctors because they felt “bluesy”. Her vision for reform involves closer coordination with the NHS, enhanced support for people who are economically inactive, and stronger local oversight of job centres and training. In November, she set out her ambition for a “genuine public employment service”, including work coaches to support people through the transition back into work.
Constraints on public spending, in particular Labour’s decision to press ahead with Tory plans to reduce the incapacity benefit bill by £3bn by 2028, make it hard to see how such aspirations will be realised. The reality spelled out by the high court is that expected changes to the work capability assessment process – which is used by the Department for Work and Pensions to judge whether claimants are fit for employment – are expected to push 100,000 highly vulnerable disabled people into absolute poverty, if they go ahead. Another 324,000 would see their benefits cut by as much as £416 a month.
About some things Ms Kendall and her team are in accord with the Lords economic affairs committee, which wrote to her this week. Seven years after the Conservatives redesigned incapacity benefit to make it less generous to less severely disabled claimants, most experts agree that this change had damaging consequences. While it was aimed at saving money, with the rationale of nudging this group towards work, the data shows that it had the opposite effect. Rigid conditions made claimants reluctant to try out a return to work, in case they lost their entitlement, while cuts to the basic level of universal credit incentivised people to claim the additional incapacity element if they could.
Ms Kendall also shares the view that assessments should be carried out in person, and not online. An effective benefits service needs a workforce that is interested in helping people, and it is a relief that ministers grasp this.
The share of GDP spent on welfare overall has not changed much since 2007, although disability benefits have risen in proportion to the rest. There is no doubt that current trends, particularly the number of younger working-age claimants, are challenging for policymakers. Shortcomings in official labour market data are in the process of being overhauled.
There is no doubt that Ms Kendall and her colleagues would prefer to lift families out of poverty than force them further into it. The risk is that without a budget to fund their more imaginative schemes, they will find themselves unable to deliver anything other than Tory leftovers, prompting another damaging row with backbenchers following those concerning the two-child benefit cap and winter fuel payment cut. To avoid this, they will need to have the courage of their reformist convictions. When it comes to supporting the poorest people in society, the Treasury must not call the shots.
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