Lana Hempsall: It will be tough to reform welfare – and only the Conservatives will do so

Lana Hempsall is an entrepreneur and business coach, Conservative councillor, the CPF National Discussion Lead for Transport, and the co-founder and director of Conservatives in Energy. 

Yesterday, Liz Kendall, Labour’s Work and Pensions Secretary introduced the Government’s long-anticipated Welfare Reform Bill, which is supposed to put into effect the Prime Minister’s commitments to control welfare spending by enabling more people back into work.

Sir Keir Starmer even described the current system as an “affront to the values of our country” that actively disincentivised people away from work. Grand words indeed, and exactly the right sentiment. But what is already crystal clear is that Labour are in no position to introduce the serious reforms that would eradicate those welfare problems.

While the numbers touted by the Government that welfare changes would supposedly save (£5bn) sound sufficient, this has to be taken in the context of the total welfare budget of almost £300bn. The reality is that Kendall’s proposals, and the new legislation, are far from a bold programme of reform.

They are little more than administrative tinkering, tweaks to assessments, and minor changes to work coach deployment. Yet even these modest measures have triggered open revolt within the party, with more than 100 Labour MPs vowing to defy him and vote down welfare cuts. If this is the reaction to incremental change, what is apparent is that any more fundamental change is not going to be championed by this Labour Government.

In response to mounting opposition to even these minor changes, some Government officials have even expressed regret about approaching welfare reform from a financial perspective at all. Given the eye-watering current costs of the welfare bill, and its predicted rise in future, the ability of our country to continue paying benefits to growing numbers of claimants is going to be the defining issue for the next few decades. Refusing to accept this fundamental truth is a further demonstration of how unlikely it is that Labour will attempt any kind of serious reform.

Other parties have offered no better. The Liberal Democrats and Greens default answer is always higher spending, more claimants and fewer checks. It’s a blank-cheque approach that takes no account of the difficult trade-offs that a sustainable welfare system requires. And now we have the new Labour-lite Reform leadership backing, not welfare reforms that would restrain expenditure, but cost billions more – all uncosted and deeply unserious for a Party currently ahead in the polls.

Welfare reform is the most pressing issue in British politics – and only the Conservatives are likely to tackle it. Costs are rising at an extraordinary rate, economic inactivity remains stubbornly high, and the system is drifting further and further from its intended purpose. A welfare state designed to lift up the most vulnerable and support people into work has instead become one that traps millions in long-term dependency, while those with genuinely serious problems, like severe physical disabilities, are not treated with the generosity their condition merits.

The status quo is simply unsustainable. Welfare spending is now the single largest item in the public budget. Not defence or education or even the NHS. And within the overall welfare budget, it is incapacity and disability benefits that most deserve special scrutiny. In 2023/24, the UK spent £296 billion on welfare. Without action to reduce the growing costs, this will bankrupt our country.

Nearly £70 billion of the welfare budget was spent on incapacity and disability benefits, a figure forecast to reach £100 billion by the end of the decade. Personal Independence Payments (PIP) in particular has seen a huge surge in claims, with over a million new recipients since the pandemic, particularly among the young and those that are claiming for mental health conditions. But is this a function of the benefits system where you receive a more generous payment if you can claim disability benefit rather than just unemployment benefits, or are we genuinely experiencing an exponential growth in people suffering with mental health conditions. If it is the latter, surely that is a matter to be addressed by the health service rather than increased welfare payments?

The long term consequences are also incredibly serious. Too many working-age adults are being written off before they’ve been given any meaningful support to return to work. At the same time, those with the severest disabilities do not receive the support they deserve. When resources are spread too thinly, those in the greatest need inevitably suffer. A system that is meant to deliver fairness ends up doing the opposite.

Britain cannot afford to keep dodging this issue. We need to rethink how eligibility and assessments work, focusing on what people can do, not just what they cannot. The system should differentiate clearly between those with permanent, life-limiting disabilities, and those with conditions that are compatible with work under the right circumstances. That will require new models of assessment, better use of clinical evidence, and support that is tailored, not one-size-fits-all. Importantly, we have to stop making payments to people whose primary need is treatment or medical help. It is baffling for example why people with minor mental health conditions like ADHD or depression, for example, should be allowed to use their benefits to lease an effectively subsidised Motability vehicle.

We also need to restore the link between work and reward. In too many cases, people on disability benefits are receiving more than they would earn in work. That’s not just economically irrational, it’s socially corrosive. It discourages effort, undermines personal responsibility, and fosters a culture of low expectations.

The basic failing of Britain’s welfare system has been clearly identified, and acknowledging it is an important first step. But recognition alone is not enough. What’s needed now is a clear-eyed recalibration of the system, one that is fair and grounded in reality.

Too many parties treat welfare as an ideological talking point or a vehicle for virtue signalling. The Party’s leadership has already said they will develop serious policy solutions and not cheap instant slogans to Britain’s problems. Where better than welfare to start that process. We did this in the past when Iain Duncan Smith led the reform programme that created Universal Credit. That, too, was a tough process.

Welfare reform is not about cutting support for those in need. It’s about ensuring the right help goes to the right people, and that individuals and families are not trapped in a system that offers only stagnation. Britain has always believed in self-reliance, fairness and hard work. Our welfare system must reflect those values once again. If other parties choose to sidestep their responsibilities, the Conservatives must take the lead again.