Universal Credit and Personal Independence Payment Bill

Paul Holmes Excerpts

2nd reading
Tuesday 1st July 2025 Commons Chamber

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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?