Working-age Welfare System

Tuesday 1st September 2026 Lords Chamber

Question

14:56

Asked by

[Lord Balfe]

To ask His Majesty’s Government what plans they have to curtail the cost of the working-age welfare system.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

So, no pressure then. My Lords, the Government are prioritising welfare reform, putting work and opportunity at the centre. Our system should support people to get into work and get on in work, while ensuring that those who cannot work get the support that they need. The Milburn and Timms reviews are looking across the social security system and will publish their final reports in the autumn. We will work across government to respond to their recommendations; in the meantime, we have a range of initiatives to support individuals to get into work.

[Lord Balfe (Con)]

I thank the Minister for her Answer. The situation that we are in today is not a Labour or a Conservative one; it is one that we have drifted into. Every day, we read in the newspapers about there not being enough money to go round. As a previous Prime Minister said, if you do not have money, you cannot spend it. Will the Government help by looking at ways in which the public sector welfare bill can be trimmed?

[Baroness Sherlock (Lab)]

My Lords, the Government are absolutely looking at how we can reform our social security system. It simply is not fit for purpose and it needs work. The noble Lord will know that we are in the middle of two vital reviews: into youth unemployment, led by Alan Milburn, and into the future of personal independence payment, led by my colleague Stephen Timms. In the meantime, we are taking action across the field, investing in support for young people, rebalancing universal credit to encourage people into work, guaranteeing disabled people the right to try, overhauling job centres and building personalised work programmes. We are determined to get this right.

[Baroness Teather (LD)]

My Lords, many people with disabilities and long-term conditions want to work and, with a lot more flexibility and support, would be able to do so. I welcome the new disabled persons bus pass with free travel, something for which my Lib Dem colleague Tom Gordon long campaigned. Does the Minister also support giving disabled people more rights to flexible working, including, for example, a right to work from home unless there is a strong business case against it?

[Baroness Sherlock (Lab)]

I am very glad that the noble Baroness welcomes the extension of bus passes. The credit should probably go to my friend Andy Burnham rather than to anyone else, but I am delighted that she welcomes it none the less. We are working extensively with sick and disabled people to support them back into work, but we must first make sure that they have the support they need, the motivation they need and, crucially, the jobs they need. We also need to work with employers. We are doing a lot of work with employers who are trying to hire people and want to make sure that they know what they can best do. Our connect to work programme is working with both the individual and the employer, to find people, connect them with jobs and make sure that they get the help they need. That is the most important step to take now.

[Baroness O’Grady of Upper Holloway (Lab)]

Can my noble friend the Minister confirm that official figures show that spending on non-pensions social security will remain at the same percentage of GDP for this Parliament—at around 5%—and that we should deal with the root causes rather than the symptoms of dependence on social security by creating decent jobs, decent homes and decent healthcare?

[Baroness Sherlock (Lab)]

My noble friend is absolutely right about the level of GDP. It is around 4.9% of GDP and, as a share of GDP, spending on social security is due to remain broadly stable all the way up to 2030-31—I say in passing that, on that basis, overall welfare spending is in fact forecast to rise by less than half as much as it did under the previous Government. What is most important is that as a Government we are still committed to reforming the system. Certainly, we want to make spending sustainable, but we also want to improve outcomes. It is not good for people to spend most of their lives with no opportunity to work. We know that is the problem. We have to reform the system, and we are committed to doing that.

[Baroness Bull (CB)]

My Lords, according to Mencap, only around 5% of adults with a learning disability are in paid work, despite 86% of people with a learning disability surveyed wanting to undertake paid employment. Can the Minister say what the Government are doing to support employers better to understand how to provide employment for people with learning disabilities, who can be such a valuable resource in the workplace?

[Baroness Sherlock (Lab)]

The noble Baroness makes an excellent point. She is absolutely right that the employment rate for people with a learning disability is unacceptably low. Through developing our connect to work programme, we have found that we need to work with both the employer and the individual who wants a job. I have been given some really interesting cases—some wonderful examples. A young woman called Jennifer, who had left college and been unable to get a job, worked with connect to work and was given help with interview support and with identifying an employer. They found an opportunity for her to work with Stagecoach. Stagecoach wants to employ such individuals and regards her as a valuable employee, but once she is in the job, connect to work can carry on supporting her and make sure that she gets the continued support she needs to stay in it. That is the way forward: to work with individuals and to find out what they most want to do. Jennifer is now a bus driver. Other people have opportunities to do other things. For each individual, it will be different, whether or not they have a learning disability.

[Lord Hintze (Con)]

My Lords, the Minister has said something very important. We have, obviously, a huge need to support the vulnerable in our country. We all agree with that. But what about what the Minister said about making sure that those who cannot work are supported? How are the Government making sure that those who are taking welfare—and there is a two-way obligation here, to the individual and to the state—are in fact vulnerable and need that support?

[Baroness Sherlock (Lab)]

The noble Lord raises an important point. We all agree that those who can work should work and those who cannot work at all should be supported. That leaves us with two questions. One is: how do you tell the difference? The second is: is it an absolute difference anyway? I think it actually is not. The mistake we have made is assuming that the world is in two categories of people: those who can work and those who never can. The fact is that for lots of us there are times in our life when we can or cannot work, and times when we can do some work. Our job is to accept that the overwhelming majority of people can work, either now or in the near future, and we know they want to. Our job is to make sure that we support people and help them. But clearly the system is there. There are clear conditionality requirements. If you can work, you should. But just telling you that is not enough. We need to give you the confidence. For example, in our work with young people—I am sorry, Chief Whip, I will stop now.

[The Lord Bishop of Manchester]

My Lords, I am glad to hear that the Minister is so passionate about this and that, overall, this is taking place. As part of that, however, the Trussell Trust tells me that the majority of people who go to food banks are already on universal credit. Are the Government going to look at what it actually costs to survive in this country so that that can be factored into what levels of universal credit people are going to be getting?

[Baroness Sherlock (Lab)]

The right reverend Prelate raises a really important point. As I know he knows, in our work on rebalancing universal credit, the Government are making the first above-inflation increase in the standard rate of universal credit. We are also investing in other things that support people with the cost of living: help with housing, with heating and with childcare. We need to support those who are out of work. Also, a lot of people on universal credit are in work, so it is important for us to help them to get on in work, develop, improve their salaries and have opportunities. Most people do not want to spend their entire life out of work. It is not good for them; it is not good for the state. That is our job.

[Lord Mohammed of Tinsley (LD)]

My Lords, can I talk about the young people whose parents are the richest—that is, the corporate parents, us, the state? In particular, can I press the Minister on supporting looked-after young people? What particular support can those young people who are leaving care look forward to from this new Government?

[Baroness Sherlock (Lab)]

That is a really important question. The Government take a number of specific steps. For example, we know that some young care leavers find it hard to get into work, so we have people in jobcentres who are specialists in that area, who identify care leavers, work with them and give them extra support. There is help for them to get extra qualifications which they may not have. We have schemes about working with employers to employ care leavers. We have people who can help them develop at the next stage. Many of them get different levels of support in the benefits system depending on their circumstances. All that makes a difference, but in the end most of them are like other young people: they need an opportunity. We are now creating a range of things: a youth guarantee, support for those who need help, hiring centres for employers—and, if you are still there after 18 months, a guaranteed job for six months with this Government. That is the help people need.

[Baroness Stedman-Scott (Con)]

My Lords, in September 2025, the leader of the Opposition, my right honourable friend Kemi Badenoch, offered the Government Conservative support for serious welfare reform in light of the warning that the cost of sickness benefit could rise to £100 billion by 2030. Will the Minister tell the House whether the new Prime Minister will take a different approach to that of his predecessor and work constructively with the Opposition to bring this rapidly rising and unaffordable welfare bill under control?

[Baroness Sherlock (Lab)]

My Lords, I well remember the offer by the leader of the Opposition—long may she stay so—to support any sensible offer on social security. I am always open to discussing with the noble Baroness and others how we can do that. We both think very similarly about the importance of supporting young people, in particular, to go out there and get jobs. I have already described that dealing with young people is a decade-long challenge. This did not happen just recently—between 2021 and 2024, almost a quarter of a million young people became NEET. It is a job for all of us as a country—employers, the state, everyone—to get out there and support young people to get the jobs that they need.