Universal Credit and Personal Independence Payment Bill

Liz Kendall Excerpts

2nd reading
Tuesday 1st July 2025 Commons Chamber

[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.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

Will the Minister give way?

[Jim Shannon (Strangford) (DUP)]

Will the Minister give way?

[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?

--- Later in debate ---

[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.

[Esther McVey (Tatton) (Con)]

Will the Secretary of State give way?

[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.

[Esther McVey]

rose—

[Josh Fenton-Glynn (Calder Valley) (Lab)]

rose—

[Liz Kendall]

I will give way to my hon. Friend.

[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.

[Mr Speaker]

I call the Leader of the Opposition.