Universal Credit and Personal Independence Payment Bill
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 1st July 2025
(2 days, 14 hours ago)
Commons ChamberUniversal Credit and Personal Independence Payment Bill 2024-26 Read Hansard Text Watch Debate
18:59 - The House divided: - Ayes: 149 / Noes: 328 - Question accordingly negatived.
19:13 - The House divided: - Ayes: 335 / Noes: 260 - Question accordingly agreed to.
This text is a record of ministerial contributions to a debate held as part of the Universal Credit and Personal Independence Payment Bill 2024-26 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Secretary of State for Work and Pensions (Liz Kendall)
I beg to move, That the Bill be now read a Second time.
This Bill and our wider welfare reforms seek to fix the broken benefits system that we inherited from the Conservatives and deliver a better life for millions of people across our country. Our plans are rooted in principles and values that I know many in this House share: compassion for those who need our help most, a belief in equality and social justice, that everyone should have the chance to fulfil their potential no matter where they are born or what their parents did, and responsibility for our constituents and our country as a whole, so that we ensure the welfare state is sustainable and lasts for generations to come. But the system we inherited is failing on all those counts.
Conservative Members left us with a system that incentivises people to define themselves as incapable of work just to be able to afford to live. They then wrote people off without any help or support, then blamed them to grab a cheap headline. The result is 2.8 million people out of work due to long-term sickness, and one in eight of all our young people not in education, employment or training, with all the terrible long-term consequences that brings for their future job prospects, earnings and health. The number of people on disability benefits is set to more than double this decade, with awards for personal independence payments increasing at twice the rate of increases in the prevalence of disabled people in our society, adding 1,000 new PIP awards a day—the equivalent of adding a city the size of Leicester every single year.
Liz Kendall
Let me make some progress.
I do not believe that this is sustainable if we want a welfare state for generations to come that protects people who most need our help. There is nothing compassionate about leaving millions of people who could work without the help they need to build a better life. There is no route to equality or social justice when 9 million of our fellow citizens are out of work and not looking for work, and when our country has one of the widest disability employment gaps in Europe. There is no responsibility in leaving our system of social security to continue as is and risk support for it becoming so frayed that it is no longer there to provide a safety net for those who can never work and who most need our help and support. This Bill, alongside our wider reforms, will help people who can work to do so, protect those who cannot, and begin to get the benefits bill on a more sustainable footing.
Labour’s historic mission is to get more people into good jobs because we know the value of good work, not only as the best route out of poverty and to raise living standards, but because good work brings a sense of purpose, pride and dignity and because there is such clear evidence that good work is good for physical and mental health.
Paul Holmes (Hamble Valley) (Con)
The Secretary of State is absolutely right that any Government that take office should aim to reduce poverty in this country. Why then do her own Government’s figures show that the actions she is taking this afternoon will put an extra 150,000 people into poverty? Does she really think that is what her Back Benchers expected when they were elected to government last year?
Liz Kendall
That is what they call chutzpah, seeing as Conservative Members put an extra 900,000 children into poverty. This Government are determined to tackle child poverty and will take 100,000 children out of poverty through our plans to extend free school meals to every household on universal credit—a downpayment on our child poverty strategy in the autumn.
I am proud that at the spending review—alongside billions of extra investment to create good jobs in every part of the country, to invest in transport infrastructure and in skills so people can get those jobs, and to drive down NHS waiting lists so people can get back to health and back to work—my right hon. Friend the Chancellor delivered the biggest-ever investment in employment support for sick and disabled people, quadrupling what we inherited from the Conservatives to £1 billion a year.
Ms Polly Billington (East Thanet) (Lab)
I thank the Secretary of State for the improvements she has made to the Bill, which are extremely reassuring for my constituents, 9,000 of whom are on personal independence payments and are now reassured. Some, however, are concerned about the number of adults who could be put into poverty, following the publication of the impact assessment yesterday. I recognise that these figures do not take into consideration the impact of the planned record investment in employment support. Will she publish further assessments that provide a more accurate view?
Liz Kendall
My hon. Friend is absolutely right that those figures do not take into account the employment impact from the investment we are putting in. We have produced extremely clear evidence that good employment support works, including Work Choice—a Labour programme ended by the Tories—which meant that 40% more disabled people were in work eight years later. We will, indeed, publish further updated impact assessments before Committee stage, spelling this out in more detail.
Jim Shannon
I have been asked by representatives of people with Parkinson’s and multiple sclerosis to put this question to the Secretary of State, and I hope she will give me the answer. They are worried that people with these fluctuating conditions will be locked out of qualifying for the higher rate of the UC health element, as a functional limitation must “constantly” apply for a claimant to meet the severe conditions criteria. Will she commit to add an explicit reference to the Bill to ensure that those with fluctuating conditions such as Parkinson’s and MS are not locked out of the higher rate? It is really important for those people.
Liz Kendall
The hon. Gentleman raises a very important point. Members have asked whether people with fluctuating conditions will meet the severe conditions criteria, which are for those with lifelong conditions that will never improve and mean they can never work. It is the case that, as someone’s condition progresses, if they change and meet those severe conditions criteria, they will be protected. One of the reasons for the Timms review, which I will come on to, is precisely to make sure this vital benefit recognises the impact of fluctuating conditions on people’s lives. That is crucial to make sure this benefit is fit for the future.
Mr Clive Betts (Sheffield South East) (Lab)
Will my right hon. Friend give way?
Liz Kendall
I will make a tiny bit of progress, and then I will give way.
As I set out to the House yesterday, we have listened carefully to concerns that there would not be enough employment support in place quickly enough by the time the benefit changes come in. We are bringing forward an additional £300 million of employment support for sick and disabled people, delivering a total of £600 million next year, £800 million the year after and £1 billion in 2028-29—increasing our total spending on employment support for sick and disabled people to £3.8 billion over this Parliament—to ensure that anyone who is affected by this Bill will be offered personalised work, health and skills support, including access to a specially trained adviser by the time the legislation comes in.
Dr Luke Evans
The last Government introduced WorkWell pilots in 15 areas for 59,000 people, providing a multidisciplinary team package to get them back into work. Am I correct in thinking that the £300 million the Secretary of State is investing is built off the back of that pilot? Are they planning to continue the pilot and grow it? The results seemed to show that it had a strong record of getting people back into work while supporting their health. That is what this House wants to do. Does she agree that that is the case, and is that the funding?
Liz Kendall
Joining up work and health support is essential. I have been to visit some of the projects in place, and they are making a really big difference. We are building on that with additional investment, quadrupling what we inherited from the Conservative party. Joining up work and health support is very important, because good health and good work are two sides of the same coin, but this needs to be available widely across the country.
Let me turn to the specific measures in the Bill. Clauses 1 to 4 begin to tackle the perverse incentives left by the Conservative party, which encouraged people to define themselves as incapable of work by rebalancing the universal credit standard allowance and health top-up. I am very proud that we are delivering the first ever sustained above-inflation rise to the universal credit standard allowance—the largest permanent real-terms increase in the headline rate of out-of-work benefits since the 1970s. Some 6.7 million households—the lowest-income households—will benefit from the increase in the universal credit standard allowance, and it will deliver a £725-a-year increase in cash terms by 2029-30 for a single person aged 25 and over.
Having listened seriously to concerns about our original proposals on the UC health top-up for existing claimants and future claimants with severe conditions and those at the end of their lives, we will ensure that for these groups, the combined value of their universal credit standard allowance and the health top-up will rise at least in line with inflation, protecting their income from these vital benefits in real terms every year for the rest of the Parliament.
Alongside those changes, schedule 1 to the Bill will ensure that people with severe lifelong health conditions will never be reassessed, removing all the unnecessary and unacceptable stress and anxiety this brings, so that they have the dignity and security they deserve. Yesterday we published draft regulations on our new right to try, which will guarantee that, in and of itself, work will never lead to a benefit reassessment, giving people the confidence to try work—something many people have called for for years.
I turn to clause 5 of the Bill, on personal independence payments. Yesterday I told the House that we have listened to the concerns raised by many Members, disabled people and their organisations about the impact of the new requirement for existing claimants to score a minimum of four points on at least one daily living activity to be eligible for the daily living component. Even though nine out of 10 people claiming PIP at the point these changes come in would be unaffected by the end of the Parliament, I know this has caused deep and widespread anxiety and stress, so we have changed our original proposals. The new four-point eligibility requirement will only apply to new claims from November 2026. This means no existing claimants will lose PIP because of the changes brought forward in this Bill, and anyone who currently receives any passported benefits, such as carer’s allowance, will also be unaffected by this change.
Mr Betts
The changes to PIP, as far as they go, are very welcome, as is the review to be conducted by the Minister for Social Security and Disability, which will be co-produced with disability groups, as I understand it. However, the Government have committed to make changes in November 2026, when that review may not have been completed. Would it not be far more logical to have the review, bring it to this House for agreement and then make the changes after that?
Liz Kendall
I will come on to this point in a moment, but the purpose of the PIP review is to have a wider look at the assessment. It has not been looked at for over a decade since it came in. I understand the sequencing point, and I will come to that in a moment. It is extremely important to have a very clear message that existing PIP claimants will now be unaffected by the changes in the Bill.
Mr Toby Perkins (Chesterfield) (Lab)
I am very grateful to my right hon. Friend for the fact she has listened this week, but she knows that many disabled people watching our proceedings today will remain very worried. She is absolutely right that the existing system is not working. Can she say more about the Minister for Social Security and Disability’s review and about how we can rebuild the confidence of disabled groups and the people who are worried, because every welfare reform seems to have been bad for them, in the fact that we can have a system that assesses who really needs it?
Liz Kendall
My hon. Friend makes an extremely important point. I will come on to say a little more about that in a moment. The review will be co-produced with disabled people, their organisations, clinicians, other experts and MPs, because we must ensure that we get this right. I have been a long-standing champion of co-production, including when I was the shadow Minister responsible for social care. I think we get the best decisions when we work closely with people.
Several hon. Members rose—
Liz Kendall
Let me say a bit more, because many hon. Friends raised these issues, including yesterday. We believe that protecting existing claimants, while ensuring that new PIP awards are focused on those with higher needs, strikes the right and fair balance going forward. I want to address some of the questions raised yesterday by Labour Members about the sequencing of the PIP changes, and the wider review of the PIP assessment that is being led by my right hon. Friend the Minister for Social Security and Disability.
Liz Kendall
I will make progress on this point.
No existing PIP claimant will be affected by changes in the Bill. They will also be reassessed under the existing rules whenever they have an award review. From November 2026, new claimants will be assessed under the four-point criteria. The purpose of the Timms review is to look at the PIP assessment as a whole, and ensure that it is fair and fit for the future. It therefore takes account of the huge changes in society, the world of work, and the nature of health conditions and disability since the benefit was first introduced more than a decade ago.
Josh Fenton-Glynn
I thank the Secretary of State for giving way. I welcome the improvements made to the Bill so far, but I think we still need more details about the co-productive element of the Timms review. Will she confirm that the review will guarantee that disabled people and their organisations are the key voice in developing this policy? Will the review change and revolutionise the view in Whitehall, so that future policies that impact disabled people will always have their voices central to the discussion?
Liz Kendall
I can absolutely reassure my hon. Friend about that. Many hon. Members have asked for precise details about how this process will work, and it is extremely important for us—we are beginning the process—to discuss this with disabled people, their organisations and other experts. It is not for me—[Interruption.] If the right hon. Member for Tatton (Esther McVey) would let me finish my sentence I will, of course, give way. It is important that we do not come up with—it would be completely wrong if we in Whitehall came up with a process and imposed it on other people. We have to do this properly.
Esther McVey
Have the Government taken legal advice as to whether it is lawful to treat people with the same conditions, disabilities and circumstances differently within the benefits system? It is morally unacceptable, but does the Secretary of State believe that it is lawful?
Liz Kendall
I gently remind the right hon. Lady that her own party had different rules and different rates for people on existing benefits compared with those on new benefits. That is something the Conservatives did—once again Conservative Members seem to be railing at the very problems that they caused.
I understand why many Members would like to see the results from the Timms review implemented before the four-point change takes effect. However, reviewing the assessment as a whole is a major undertaking that will take time to get right, especially if we co-produce it properly. It will be for those involved in the review to determine the precise timetable, but we are absolutely committed to moving quickly and completing the review by next autumn. I assure the House that any changes following the Timms review will be implemented as soon as is practically possible via primary or secondary legislation. Once we have implemented changes from the review, any existing PIP claimant can ask for a reassessment.
Let us be honest: welfare reform is never easy, especially perhaps for Labour Governments. Our social security system directly touches the lives of millions of people, and it is something that we all care deeply about. We have listened to concerns that have been raised to help us get the changes right. The Bill protects people who are already claiming PIP. It protects, in real terms, the incomes of people already receiving the UC health top-up from that benefit and their standard allowance. It protects those with severe lifelong conditions who will never work, and those near the end of their life, as we promised we would. But I have to tell the House that, unlike the previous Administration, this Government must not and will not duck the big challenges facing this country, because the people we are in politics to serve deserve so much better.
We are taking action to put the social security system on a sustainable footing so that it is there for generations to come. We are helping millions of low-income households across the country, by increasing the standard rate of universal credit. And because we know that there is no route to social justice based on increased benefit spending alone, we are providing record investment in employment support for sick and disabled people, so that they have the same rights and chances to work as anybody else. Our plans will create a fairer society in which people who can work get the help they need, and where we protect those who cannot—a society where the welfare safety net actually survives and is always there for those who need it. Above all, this Government are determined to give people hope that tomorrow will be better than today, with real opportunities for everyone to fulfil their potential and build a better life. I commend the Bill to the House.
Mrs Kemi Badenoch (North West Essex) (Con)
We are staring down the barrel of a crisis that no serious Government can ignore. The welfare system no longer works as it should, and what was once a safety net has become a trap. A system designed to protect the most vulnerable is now encouraging dependency, and dragging this country into deeper debt. The welfare system is a crucial safety net for the poorest and most vulnerable in our society, so I was quite surprised at the tone that the Secretary of State decided to take today. She thinks that she can stand there and get away with the fiction that all this was caused by the previous Government, so let me refresh the memories of Labour Members, especially those who were not here at the time.
In 2010, we inherited 8% unemployment, and we brought it right down. The last Conservative Government reformed welfare to introduce universal credit, and our reforms helped to ensure that unemployment more than halved and was at a near record low. What have we seen since Labour came in? Unemployment has risen every single month since Labour came into office. During our time, 800 jobs were created for every day we were in office. At the same time, until the covid pandemic, we kept spending under control, cutting the deficit every year. But covid changed everything—[Interruption.] It did, and now we face a new—[Interruption.] Mr Speaker, it is delightful to hear Labour Members laughing. I remember when we sat on the Government Benches, and they were demanding that we spent more and more and more money. Thank God it was Conservatives who were there under covid—Labour would have bankrupted the country!
We face a new reality. Under this Government, every working day 3,000 people move on to incapacity benefits—3,000 every single day. That is a 50% increase from when we left office. The Government have been in power for only one year; imagine what it will be like after the next four years. A 50% increase and 3,000 people going on to incapacity benefits every day is not normal, sustainable or acceptable. Spending is spiralling under Labour.
Sir Edward Leigh (Gainsborough) (Con)
My right hon. Friend quite rightly mentions covid. I am sure there is one thing that we can agree on. Unfortunately, people were assessed much more often in person before covid, and during covid that was understandably stopped. Surely we can all agree that we have to get those in-person assessments going and get them going quickly.
Mrs Badenoch
The Father of the House is absolutely right. This is something we should all be able to agree on, but the Government are too busy trying to shift the blame instead of solving the problem.
Let us talk about solving the problem. We have 28 million working people propping up 28 million people who are not working—the rider is getting heavier than the horse. Health and disability benefits were £40 billion before covid. By 2030, on this Government’s spending plans, they will hit £100 billion.
Emily Thornberry (Islington South and Finsbury) (Lab)
I wonder whether the right hon. Lady could help the House. During the 14 years when the Conservatives were in power, when was the time that the benefits system worked well?
Mrs Badenoch
I will remind the right hon. Lady of our inheritance. We took difficult—[Interruption.] I will. I have said it before, and I will say it again: we had 8% unemployment, and we got it down to 4%. Every single time Labour leaves office, it leaves more people unemployed.
The welfare system needs continual reform. We took difficult decisions and got universal credit through with so much opposition from Labour. We improved the system, but that does not mean it cannot be improved further. We have offered to help, but the Government do not want any help: they just want to make things worse.
By 2030, on this Government’s spending plans, we will hit £100 billion on health and disability benefits alone. That is more than we spend on defence. That should make everyone in this House stop and think, because this Bill does nothing to fix that problem. That is why we cannot support it.
The Conservative party is the only party in this House urging restraint. Unless this House acts, the Government will bankrupt our children. They will bury the next generation under a mountain of borrowing and debt, and they will do it not because we have no choice, but because they lack the courage to choose. A fundamental and serious programme to reform our welfare system is required, and this Bill is not it—it is a fudge. I feel sorry for the Secretary of State: she looks as if she is being tortured.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
Will the right hon. Lady give way?
Mrs Badenoch
I will in a moment.
We all know why this is happening: this is a rushed attempt to plug the Chancellor’s fiscal hole. It is driven not by principle, but by panic. The changes were forced through not because they get more people into work, but because someone in 11 Downing Street made a mistake. It is clear that these changes were not designed to introduce fundamental reforms.
How did we get here? Last year, at the Chancellor’s first Budget, she left herself no headroom. That same Budget killed growth, meaning that unemployment has increased every month since Labour took office. This is a good time for me to remind the House again that every time Labour leaves office, it does so with unemployment higher than when it came in, and it is doing that again.
Mrs Badenoch
I will give way to the hon. Member for Birmingham Northfield (Laurence Turner) first.
Laurence Turner
I am sure the right hon. Lady would not want an inaccurate statement to stand on the record. Unemployment fell under just two 20th-century Governments: the first Labour Government and the 1970 Government of Ted Heath. I know that she is repeating a standard Conservative party message, but it is a really cynical and silly misuse of statistics.
Mrs Badenoch
The hon. Gentleman is simply wrong. He needs to get an education and look at the facts.
Graham Stuart
Does my right hon. Friend agree that the chief architect of the fiasco faced by people with disabilities and every member of the Labour party today is the Chancellor of the Exchequer? The fact that she is not here to face up and take responsibility is all we need to know about her and those on the Government Front Bench.
Mrs Badenoch
My right hon. Friend is quite right: this is a fiasco, and it is the Chancellor’s fault. She marches Labour Members up and down the hill all the time, and they are the ones who have to face their constituents. We are trying to help to get a welfare system under control and get people into work.
My right hon. Friend the Member for Beverley and Holderness (Graham Stuart) is right to raise the Chancellor. When the economic outlook worsened this spring, she chose to force through these changes to welfare, which are designed not to reform or improve the system, but to address a hole in her numbers. Those changes were rushed for Rachel, as we say. I watched when she made that Budget, and it was quite clear that she had no idea of the consequences of her decision. The country should not have to pay for the mess she has made, and neither should disabled people. Even with the changes in this Bill, welfare spending will still be billions higher at the end of the Parliament. Slowing down how much you increase spending is not a cut.
Mark Ferguson
I do not know about the rest of the House, but I am slightly baffled. The Leader of the Opposition has made a virtue of her blank slate and her blank sheet of paper, but is she in favour of more or less? Is she in favour of the actions of her Government or not? This complete lack of taking responsibility is exactly what got us into this mess in the first place.
Mrs Badenoch
I am not surprised that the hon. Gentleman is baffled, because he is clearly not listening to what I am saying. We had three conditions. We have been very, very clear that we want to see the welfare budget come down. I will make some progress.
Even with the changes in this Bill, welfare spending will still be higher by billions at the end of this Parliament. Slowing down an increase is not a cut: we need to get this under control.
Mrs Badenoch
I will make some progress.
Despite the obvious flaws in the Bill, we offered to support benefit changes in the national interest. The hon. Member for Gateshead Central and Whickham (Mark Ferguson) asked a question, and I will answer it very clearly for those who have not been paying attention. We agreed to support the Government if they could make three simple commitments; they were not unachievable or unreasonable commitments. First, they had to cut the overall welfare bill, because we are spending far too much already. Secondly, they had to get more people into work. Thirdly, they had to stand by the Chancellor’s own commitment that, with taxes at a record level because of her choices, she would not come back for more tax rises.
What did we get from the Government? A sneery response indicating that they could manage on their own. How’s that going? What happened instead was that the number of MPs opposed to the Bill grew ever larger, until the inevitable U-turn finally came, announced by a press release dispatched after midnight and a panicked letter setting out that the reforms had been gutted. The Bill is now more incoherent than it was at the beginning.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
Just to reflect on the record of the previous Government, as of 2024, approximately 24% of the UK population—nearly 16 million people—were living in poverty. Between 2019-20 and 2022-23, an additional 2.1 million people were living in poverty. In the year to April 2024, before the Labour Government came into power, 4.45 million children, or 31% of children in the UK, were living in relative poverty. Will the right hon. Lady agree with me that the previous Tory Government failed a majority of the population, including disabled people and children?
Mrs Badenoch
I definitely will not agree with the hon. Gentleman. He is talking about relative poverty figures. The fact is that the best way to get people out of poverty is to get them into work—something we did again and again and again.
The Bill is more incoherent now than it was at the beginning. It does not do the job at all. Reforms that were not enough in the first place will now cut only £2 billion from a ballooning budget, instead of £5 billion. They will create a new welfare trap and a two-tier welfare system. Right up until the last moment, the Government kept pushing and pushing, ruling out changes and sending their poor, weary Ministers and ambitious Back-Bench bootlickers out on to the airwaves. At the last moment, as we have seen before, the Government abandon them after all of that—they have been hung out to dry.
The Government do not care how they have made their Back Benchers look, and it is not for the first time. Week after week, the Chancellor was sent here to say with a straight face that she was right to cut the winter fuel payment, that there would be no turning back and that the country’s finances would simply collapse if she did not take pensioners’ fuel money and give it to the trade unions, and her Back Benchers sucked that one up. They muttered and they grumbled, but each of them went back and told their constituents that the winter fuel payments were being confiscated to fix the foundations.
Only once pensioners had sat in the cold all winter, the Chancellor had tanked the economy and Labour MPs had had the door slammed in their face up and down the country did they finally accept that it was a mistake. This time, when asked to line up behind a Bill that takes money from older, disabled people with physical disabilities—a Bill that, according to the Government’s own modelling, gets no one into work—funnily enough, lots of Labour MPs did not fancy another go. Perhaps they will think twice next time the Chancellor comes to them with a bad idea.
Paul Holmes
The Prime Minister’s inability to control his Back Benchers means that the Chancellor now has to find an extra £2.5 billion to fill the savings that she is claiming to have made. Can the Leader of the Opposition guess how she might raise that money?
Mrs Badenoch
The fact that the Government have refused to commit to not raising taxes means it is probably inevitable that they will. However, it is quite clear that Labour MPs will feel emboldened to push for more unaffordable changes to our welfare system, including the two-child benefit cap.
Let us be clear: part of the reason why these plans have been so rushed and badly thought through is the mess the Chancellor has made. This Bill is an attempt to find the quickest and crudest savings possible—to plug the hole in the public finances that she has created—but the Chancellor is not the only one to blame. It beggars belief that the Labour party came into office after 14 years in opposition with no serious plan for reforming welfare. What was Labour doing all that time? The welfare bill is already totally unsustainable, and it is only getting worse.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
As one of the Labour Back Benchers who will be supporting the Government, I would just point out that there are not that many Back Benchers behind the Leader of the Opposition, and there are fewer every week. However, given that she has just said that she wants to cut the budget of the Department for Work and Pensions further, perhaps she could tell us what she would cut. What exactly would she do?
Mrs Badenoch
We would cut unemployment.
As I was saying, health and disability benefits are forecast to rise to £100 billion, meaning that one in every four pounds raised in income tax will pay for those benefits. That is not sustainable. Until the pandemic, we in the Conservative party had spent years bringing down the benefits bill and getting people back into work, including millions of disabled people. Talent, energy and ingenuity are not confined to those in perfect health. If we want to afford public services, improve people’s lives and compete globally, we cannot consign so many people to a life out of work—we have to get them into work. I believe that the whole House agrees that the system needs change. We may disagree on what exactly that change looks like, but what we have in front of us today is just a big mess.
Sir John Hayes (South Holland and The Deepings) (Con)
The Secretary of State was right: welfare reform is tough, and Governments tend to duck the issue, with notable exceptions such as my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith). However, if a Government are going to change welfare radically, they should surely review the options and then decide which ones to take. By contrast, this Government have decided on their option, and are then going to review what they might have done. Surely that is not the right way to run welfare, or any part of Government.
Mrs Badenoch
My right hon. Friend makes an excellent point. I have nothing further to add—he said it as well as it could possibly be said.
The whole House agrees that the system needs to change in one way or another, but what we have in front of us today is a big mess; it is neither fish nor fowl. Because of the Government’s hasty concessions, we now have a two-tier benefits system under which people who are already on benefits will be incentivised to keep them.
There are other issues. Why, for instance, should someone diagnosed with Parkinson’s after November 2026 receive a lower payment than someone diagnosed a month prior? We need to fix a whole load of problems. For instance, we need to filter out people who are gaming the system, we need to redesign the system so that genuinely disabled people do not find it so Kafkaesque, and we need a fundamental rethink of who we can afford to support and why. One in four people in this country now self-report as disabled—that is an extraordinary state of affairs. We clearly cannot afford to support all of them; rather, we should focus that support on those with the greatest need.
Many people with disabilities live full and independent lives, contributing to society. Research published by the Centre for Social Justice last week shows that we could save up to £9 billion by restricting benefits for lower-level mental health challenges such as anxiety. Labour Members ask what we would change—that is one of the things we would change. Findings published by the TaxPayers’ Alliance today show that people with conditions including acne and food intolerance are getting benefits and entitlements such as Motability. The impact assessments for the Bill—not my impact assessments, but the Government’s—show that it will get no one into work, so the Government should think again. We will support them to do so.
We support replacing remote or online assessments for claimants with face-to-face assessments—that simple change alone could dramatically reduce the number of new claimants. Before the last election, we outlined reforms that the new Government rejected out of hand, so will the Secretary of State return to them? The changes we are discussing today are rushed and confused. Rather than the fundamental reforms we so badly need, we have been presented with a botched package of changes that have been watered down and carved apart in the face of Back-Bench pressure. There is no way we can back this, so instead of allowing her Back Benchers to dictate her policy, the Secretary of State should go back to the drawing board. She should cut the overall welfare bill, get people into work, and eliminate the need for new tax rises. That is a programme that we would support in the national interest.
Andrew Pakes
I thank my hon. Friend for making an important point. I would, if possible, give my right hon. Friend the Minister for Social Security and Disability Duracell batteries to turbocharge his work in this area.
The Minister for Social Security and Disability (Sir Stephen Timms)
During this debate, my hon. Friend and others across the House have raised concerns that the changes to PIP are coming ahead of the conclusions of the review of the assessment that I will be leading. We have heard those concerns, and that is why I can announce that we are going to remove clause 5 from the Bill in Committee. We will move straight to the wider review—sometimes referred to as the Timms review—and only make changes to PIP eligibility activities and descriptors following that review. The Government are committed to concluding the review by the autumn of next year.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
On a point of order, Madam Deputy Speaker. I would be grateful for your clarification. We have just heard that a pivotal part of the Bill, clause 5, will not be effective, so I ask this: what are we supposed to be voting on tonight? Is it the Bill as drawn, or another Bill? I am confused, and I think Members in the Chamber will need that clarification.
The Minister for Social Security and Disability (Sir Stephen Timms)
We have had a passionate and eventful debate. We have heard the concerns, and the Government will amend the Bill, as my right hon. Friend the Secretary of State and I have set out, but the system we have inherited does not work. Uniquely in the G7, our employment rate is still lower than before the pandemic. Every other G7 country has got back to where it was before, or better, but we have not. The system is trapping hundreds of thousands of people needlessly in low income and inactivity. It tells people that they cannot work, and for many of them that is simply untrue. We have to change that.
John McDonnell (Hayes and Harlington) (Ind)
I am sorry to come in so early in the Minister’s peroration, but we have limited time. Can I have the assurance, on the concession given this evening with regard to the Timms review, that its outcome and recommendations will be in primary legislation, not delegated legislation?
Sir Stephen Timms
Let me say a little about the announcement I made in my intervention on my hon. Friend the Member for Peterborough (Andrew Pakes) earlier on. We have listened to the concerns expressed in the debate, specifically about the new four-point threshold being implemented before the outcome of my review. As I have said, we will in fact move straight to my review and make changes to PIP eligibility activities and descriptors only following that review.
Alison Hume (Scarborough and Whitby) (Lab)
May I ask the Minister to confirm at the Dispatch Box that clause 5, which specifically references the need for claimants to score four points in order to receive the daily living allowance, will be removed from the Bill?
Sir Stephen Timms
Yes, I can confirm to my hon. Friend that that is the case. We will table the amendment to do that.
Let me say in answer to the hon. Member for South Antrim (Robin Swann), who raised this point perfectly properly in the debate, that we will also remove the parallel provisions for Northern Ireland. He suggested that that would mean removing clause 6, but it does not mean that, because there are a lot of other things in schedule 2, which is referenced in clause 6. Paragraph 4 of schedule 2 addresses the points that we are dealing with.
Several hon. Members rose—
Sir Stephen Timms
Let me make a little further progress. I still have not quite answered the question put to me in the first place in the intervention by my right hon. Friend the Member for Hayes and Harlington (John McDonnell). His question was about whether the outcome of the review will be implemented in primary or secondary legislation. That depends on the outcome of the review and the form of the assessment we take forward. We will come back to that when we have concluded the review.
Several hon. Members rose—
Sir Stephen Timms
Let me make a little bit of headway before I give way again.
Under the last Labour Government, in the 12 years up to 2010, the disability employment gap fell steadily. In 2010, as soon as the Tories and Lib Dems took over and scrapped the new deal, it stopped falling, and it has barely shifted since. This Bill opens up the chance for proper support into work once again for people who are out of work on health and disability grounds. We will provide that again, recognising that with—for example—far more mental health problems among young people, the needs post pandemic will be different from those of the past. I listened with great interest to the powerful speech made by my hon. Friend the Member for Penistone and Stocksbridge (Dr Tidball), calling for a target for the disability employment gap. She makes a strong argument, and that is the kind of approach that we need to develop as we bring forward our plans for employment support.
Several hon. Members rose—
Sir Stephen Timms
I will not give way at the moment. The Bill opens up that possibility, and it deals with work disincentives inserted into universal credit by the previous Government. The current system forces people to aspire to be classified as sick in order to qualify for a higher payment, and once so classified, it abandons them. We have to change that system.
Simon Hoare
The House knows that not only is the Minister an honourable man, but he has spent the largest proportion of his parliamentary career looking at these issues. He must surely understand, however, that the confusion that has been expressed in this place is now being felt and expressed in the country at large. I have never seen a Bill butchered and filleted by its own sponsoring Ministers in such a cack-handed way—nobody can understand the purpose of this Bill now. In the interests of fairness, simplicity and natural justice, is it not best to withdraw it, redraft it, and start again?
Sir Stephen Timms
No, Madam Deputy Speaker. Let me tell the hon. Gentleman one of the things that the Bill does. Part of the problem is that it is very hard to bring up a family on the standard allowance of universal credit. The Tories reduced the headline rate of benefit to the lowest real-terms rate for 40 years. Families have to rely on food banks, and people aim to be classified as sick for the extra benefit. The system should not force people into that position; it needs to be fixed, and the Bill makes very important changes in that direction.
Peter Lamb (Crawley) (Lab)
I came here today with the intention of voting against the Government on this Bill. I have to say that with clause 5 having been removed —which, as I am sure everyone at home will be delighted to know, completely withdraws PIP from the scope of the Bill—there is consequently nothing to vote on. However, could the Minister give me some comfort by confirming whether or not the Timms review is going to take place within a spending envelope?
Sir Stephen Timms
I can assure my hon. Friend that the review is not intended to save money—that is not its purpose. The review is to get the assessment right and make sure we have an assessment that will be fit for the future.
Several hon. Members rose—
Sir Stephen Timms
I need to make a little more progress. As a number of Members highlighted in the debate, including my hon. Friends the Members for Clwyd North (Gill German) and for Southampton Itchen (Darren Paffey), a key step in this Bill is the first ever permanent real-terms increase in the standard allowance of universal credit. Actually, it is the first permanent real-terms increase in the headline rate of benefit for decades, and of course, the Tory party is against it. The Tories froze benefits time and again, and created the work disincentives and mass dependence on food banks that this Government are determined to now erase.
We are, of course, also concerned that the future cost increases of PIP should be sustainable. Let me just look back at the record of those cost increases. In the year before the pandemic, 2019-20, PIP cost the then Government £12 billion at today’s prices; last year, it cost £22 billion. We want the system to be sustainable for the future. That is extremely important, because many people with large costs arising from ill health or disability depend on PIP. Those people need to be confident that the support will be there in the future, as well.
Paul Holmes
The Minister is doing an admirable job defending the farcical. Last week, there were £5 billion of savings. Today, there were £2.5 billion of savings. Then he came to the Dispatch Box and did three more U-turns. As he stands at that Dispatch Box today, how much will these new measures save the taxpayer?
Sir Stephen Timms
We will set out those figures in the usual way.
The last Government wanted to change the personal independence payment from cash to vouchers. They wanted to take the independence out of the personal independence payment, and we opposed them. It has been suggested that the benefit should be frozen, but the costs that the benefit is contributing to are continuing to rise along with all the other costs, so we oppose that, too. Some argue for means-testing, but disability imposes costs irrespective of income. We reject all those proposals.
Let me just make a comment about the concern that has been expressed—it does not arise now, given what I have announced—about a two-tier system. A two-tier system is completely normal in social security. PIP replaced DLA in 2013, but half a million adults are still on DLA today, and that does not cause problems. Parallel running is normal, and actually it is often the fairest way to make a major change.
Barry Gardiner
I think that Members on the Government Benches appreciate the concessions that the Minister has already made. When he is talking about whether measures will be put in primary legislation, he must understand that Members will not be able to amend things if they are not in primary legislation. That is a key concern when we do not know the outcome of the review.
Sir Stephen Timms
My answer to my hon. Friend is the one I gave earlier: we need to await the outcome of the review and the assessment that it develops to determine whether it will be implemented in primary or secondary legislation.
Several hon. Members rose—
Sir Stephen Timms
I want to make some further headway. In her speech, my hon. Friend the Member for York Central (Rachael Maskell) drew attention to the fact that she and I had known each other for a long time, and that is correct. She urged us to listen to the voices of our constituents. In February, someone I had not met before came to my constituency surgery. He explained to me that he lost his arm aged six in a road accident. As a result, on leaving school at 16 he could not find a job. He tried really hard, but he could not find an employer that would take him, until in the year 2000 somebody told him about the new deal for disabled people, which found him a job. He then worked for 23 years without a break in a whole series of different jobs. He brought up his children and he paid his taxes, until in October 2023 he was in an unsatisfactory zero-hours job and he left it. To his dismay, he has not been able to find a job since. He came to me as his local MP to ask where to get help again, like he had from the new deal, but unfortunately that was all scrapped by the Tories and the Lib Dems after 2010. We are determined now to provide proper support again, and my right hon. Friend the Secretary of State yesterday announced further early funding for that support.
Several hon. Members rose—
Sir Stephen Timms
I will not be giving way again. The Tories were never really interested in the disability employment gap. They had a brief flirtation in the 2015 general election campaign, when David Cameron suddenly announced a target to halve the gap. Unfortunately, as soon as that general election had been safely won, that target was immediately scrapped, and they reverted to type.
We do care about disability employment. That is what we are making changes to address. In this Bill, we are making the changes to deliver.
Question put, That the amendment be made.
Division 248
Ayes: 335
Labour: 333
Independent: 3
Noes: 260
Conservative: 100
Liberal Democrat: 70
Labour: 51
Independent: 12
Scottish National Party: 9
Green Party: 4
Democratic Unionist Party: 4
Plaid Cymru: 4
Reform UK: 4
Social Democratic & Labour Party: 2
Traditional Unionist Voice: 1
Alliance: 1
Ulster Unionist Party: 1