Helen Whately: How Labour sabotaged itself three different ways on Welfare – and still misses the real point

Helen Whately is Shadow Secretary of State for Work and Pensions and is the MP for Faversham and Mid Kent.

Beware unintended consequences. They are the pitfall of many a well-intentioned ministerial plan.

As the health and sickness benefits bill heads towards £100 billion, with 3,000 people signing up every day, the creators of the welfare state can’t have intended it to turn into this.

In 2013, the Coalition Government launched Universal Credit. It was a hugely ambitious reform to the complex mess of multiple means-tested benefits. Its path was not an easy one, but it is lauded around the world for its success in making sure work will always pay. During the years of coalition and then the Conservative Governments from 2015 to the pandemic, the number of people on benefits, and the benefits bill itself, went down.

So, what went wrong?

There is still more to do to move households off Universal Credit, but the real problem is the other part of the system; the benefits which help people with disabilities and ill health. That is the part of the welfare system which has grown so steeply and unsustainably during and since the pandemic. And that is the part which urgently needs fixing.

But instead of fixing it, this Labour Government is about to make it worse.

Last week their plan involved £5 billion worth of cuts, predicted to fall hardest on older people with physical disabilities claiming ‘Personal Independence Payments’ or PIP and would not get anyone into work. Unsurprisingly that plan has come unstuck. It has come unstuck because it is woefully unambitious about savings, conspicuously lacks compassion, and achieves no meaningful reform of a system we all know is broken.

We know the country can’t afford this bill to keep going up, nor can we afford to see so many lives wasted as people stay at home living off the state rather than earning their own living. So, we offered Keir Starmer a helping hand in the national interest – to back his bill if he committed to cutting the cost of welfare, getting more people into work, and using those savings to avoid putting up taxes in the autumn.

But rather than take up his offer he has diminished the paltry ambition of his original plan yet further, bringing the forecast savings down to just £2.5 billion. And adding insult to injury, they are going to introduce a two-tier benefits system. Existing claimants see no change, but their original plan will still apply to new claimants. It looks like a whole new welfare trap is about to be sprung on our country.

The tragedy is that it doesn’t have to be this way.

In just a few months as Shadow Secretary of State for Work and Pensions, it’s crystal clear to me some of the things that need to change.

For a start, benefit assessments have to go back to being face to face – as they were before the pandemic. The switch to telephone assessments made sense when Covid made meeting in person too risky especially for anyone in poor health. I can see how those phone assessments also seemed like a good way to get down the Covid backlogs too. But they are not up to the task of assessing who needs what help in anything other than a crisis.

Then the Government needs to get a grip of the rise in claims for common mental health problems like anxiety and mild depression.

Claims for these sorts of things and behavioural conditions, like ADHD, are the main reason for the steep rise in the number of people in sickness benefits and make up more than half of new claims.

Quite apart from the cost, the system we have now is signing people off onto benefits when they should be starting out in life in the workplace. This is the case even when the benefit in question is PIP, which in theory doesn’t stop you working – in fact some people use their PIP to help them work – but many others worry that if they work, they will be seen as too well to claim.

Sick notes are causing harm too, with 94 per cent of people applying for sick notes being told they are too sick to do any work at all.

Like the PIP assessments, sick notes are often done over the phone. No face-to-face appointment and no one taking the other side of the argument, saying to – for instance – a young person struggling with anxiety, that maybe with a bit of help they might be able to work.

A young person with anxiety deserves help, but they also deserve hope. They deserve someone willing to say, “you can do this,” not just, “have a few months off”.  They need support, structure and social contact. Work can provide all of these things – and better still, purpose.

But nothing we’ve seen from Labour over the last couple of weeks suggests they have the courage and conviction to grip this problem. And in the meantime, our welfare bill will only continue to rise.  From the moment the Government announced their welfare cuts, it was clear they were in trouble. Then with their winter fuel payment U-turn, the outcome was inevitable. The latest U-turn was just a matter of time.

And with another U-turn, the message is sent loud and clear to the country that Keir Starmer is not in charge.

This is now the defining pattern of his government. We have a system that tells people they’re too sick to work, and a government too scared to say otherwise.

You can’t lead a country like that.

What we are seeing is a government afraid of its own reflection. The truth is that large parts of the Parliamentary Labour Party do not believe in limits. They do not believe the welfare bill is too high, or that dependency can be damaging. From the moment they entered office, they handed out blank cheques to the unions that fund them, shelved Conservative reforms that would have restored some accountability, and doubled down on a model that is quietly falling apart.

Conservatives understand that leadership means choosing, holding the line, and owning the consequences. That’s what we did in government, we made the hard choices. And by the time we left office, there were over four million more people in work than in 2010. That was the product of a government that believed in the power of work.

We had a plan to do it again. To overhaul a benefits system that too often writes people off instead of helping them forward. We committed to reforming the fit note process, challenging the assumption that every diagnosis means permanent incapacity. We set out a clear approach to reassess work capability with fairness and rigour, ensuring support was focused on those who need it most, and restoring the expectation that, where work is possible, it should be pursued.

Our £2.5 billion Back to Work Plan laid out how we’d expand employment support and strengthen work requirements, targeting the 1.1 million people who could be in work but had been let down by the current system. This was about purpose, making sure it always paid more to work than to stay on benefits, and building a system that helped people move forward, not disappear.

We even offered the government a way out on their recent proposals. A deal in the national interest. If Labour was serious about tackling the problem, if they were prepared to bring welfare spending down, to help people into work, and to do it without loading more tax onto working families, we said we would help them pass it. It was the responsible thing to do.

But instead of leadership, we got a retreat.

For the sake of us all, Keir Starmer needs to use his one-year anniversary to rethink what it means to be our Prime Minister. His report card says, ‘must do better’.