Welfare reform: Speech to the IPPR by Work and Pensions Secretary
Source: gov.uk (2025-05-21)

Secretary of State for Work and Pensions Rt Hon Liz Kendall MP speech to the IPPR setting out the case for welfare reform.

I’m very grateful to my former employer IPPR for hosting us and to all of you for taking the time to come along, I’m especially grateful to Dominic for sharing his experiences, and I thought that was really important to hear today - about the benefits work brings to you, and the struggles you have faced, and your hopes for the future.

I want to talk about the Government’s welfare reforms.

How they will transform people’s lives, as part of our Plan for Change.

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How these reforms will help ensure our welfare state is sustainable for the future.

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Now Getting Britain Working is central to the Government’s Plan for Change.

It is vital to delivering higher living standards in every part of Britain.

And it’s vital to achieving the number one mission of this Government, which is growing the economy.

But Getting Britain Working is about so much more than this.

It’s about giving people the dignity and self respect that we know good work brings.

The purpose and belonging that Dominic spoke about so powerfully.

It’s about improving the health of the nation, because we know good work is good for people’s mental and physical health – and can help reduce pressure on the NHS.

And Getting Britain Working is critical to driving down child poverty and ensuring every child starts school ready to learn – perhaps the single most important step to transforming equality and opportunity in this country.

And the scale and urgency of our task is there for all to see.

Nearly 1 in 10 people of working age are now on at least one sickness or disability benefit.

A near record 2.8 million people are out of work due to long-term sickness.

1 million young people are not in education, employment or training – that’s more than 1 in 8 of our young people - with all the long-term consequences this brings for their future health, job prospects and earnings potential.

And 300,000 people with health conditions are falling out of work every single year, piling up even greater problems for the future.

The result is millions of people who could work written off and denied the chance to build a better life …

… with all these challenges far worse in parts of the Midlands and the North, whose economies were decimated in the 80s and 90s when whole industries closed, and who have never been given the investment, support and opportunity they need to recover.

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… with the benefits bill for sickness and disability up £20 billion since the pandemic and set to rise by a further £18 billion by the end of this Parliament, unless we change course.

And the truth is … it doesn’t have to be this way.

We are the only economy in the G7 whose employment rate still hasn’t returned to pre-pandemic levels.

And spending on sickness and disability benefits in most other comparable countries is either stable or falling since the pandemic … yet ours continues to inexorably rise.

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And there is nothing inevitable about Britain’s future path, if we have the courage and conviction to act.

We must start shifting so much spending from the costs of “failure” to investing in the jobs, skills and public services that people need to build a better life.

This requires leadership and it requires reform.

Now the truth is, welfare reform is never easy. And it is rarely popular.

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So we will reform the welfare state.

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Changing it to meet the social and demographic challenges of today and tomorrow and delivering the fairness, equality and opportunity people need and deserve.

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Reforming the welfare state to offer them the same rights and chances to work as anybody else.

When the welfare state was created, average life expectancy was 65, and the most common cause of illness and death was infectious diseases and accidents.

Now, average life expectancy is around 80. And 1 in 7 babies born today is likely to live to 100.

Back then, disability was the exception. Now, 1 in 4 of us self-reports as disabled. And 1 in 3 of us will have a long-term health condition.

But the welfare state has simply not kept pace with these changes.

Our benefit system in particular forces too many sick and disabled people into a binary choice of can or can’t work – when we know many people’s physical and mental health conditions fluctuate, and many sick and disabled people want to and need to work.

The system then writes people off, and traps them … without offering any help or support.

The number of people on the health top up of Universal Credit is set to rise by 50 per cent to 3 million by the end of the decade.

And the number of people on Personal Independence Payments is set to more than double to 4.3 million.

There are now 1,000 new PIP awards every single day. That’s the equivalent of adding a city the size of Leicester every single year.

This is not sustainable or fair – for the people who need support and for taxpayers.

So unless we reform the system to help those who can work to do so…

Unless we get social security spending on a more sustainable footing…

And unless we ensure public money is focused on those with the greatest need and is spent in ways that have the best chance of improving people’s lives…

…the risk is the welfare state won’t be there for people who really need it in future.

That is why we are grasping the nettle of welfare reform.

Not for the sake of it, but to ensure the welfare state lasts for generations to come.

Now we have already made huge strides in getting Britain working and growing again.

We are improving the quality of work and making work pay, with our landmark Employment Rights Bill.

We are creating more good jobs in every part of the country – from clean energy to construction and through our modern industrial strategy.

And we are investing an additional £26 billion this year to drive down NHS waiting lists, because getting people back to health is crucial to getting them back to work.

But we also need big changes in our system of social security and employment support to deliver greater fairness and opportunity.

Our plans are based on three clear objectives.

First, overhauling the system to help those who can work, get into work and stay in work.

Last autumn our Get Britain Working white paper kicked off the biggest reforms to employment support in a generation, backed by and additional £240 million…

… overhauling our Jobcentres to create a new national jobs and careers service, and shift the focus away from benefit administration alone.

… investing in 16 new trailblazing programmes across the country – led by Mayors and local areas – to join up work, health and skills support, ensure every young person is earning or learning and to tackle the scar of economic inactivity.

This year, we announced a further £1 billion a year in our new ‘Pathways to Work’ offer.

Along with programmes like WorkWell, Connect to Work - which is being rolled out to the whole of England and Wales by December - and freeing up 1,000 work coaches to support sick and disabled people….

…. Pathways to Work will guarantee a comprehensive offer of health, work and skills support for anyone who needs it.

… rolling out from next April when our benefit changes start to come in…

…. the biggest ever package of support for sick and disabled people.

To underpin these changes in employment support, we are also creating a more pro-active, pro-work system.

We are consulting on a new Unemployment Insurance to provide a higher rate of time-limited income protection for people who lose their job but have paid into the system.

We are scrapping the failed Work Capability Assessment [Political content removed] to help end the binary can/can’t work divide.

We are reforming Universal Credit to encourage people to find work, and not stay on benefits…

… reducing the health top up for new claims from April 2026, alongside active help to find work.

…. and bringing in a sustained above inflation increase to the standard allowance in Universal Credit for the first time ever, delivering a cash increase of £725 a year by the end of the Parliament.

We’re introducing a new ‘right to try work’ by legislating to guarantee that work in and of itself will never lead to someone being called in for a benefit assessment to give people the confidences to take the plunge and try work.

To underpin our Youth Guarantee we are consulting on delaying access to the health top up in Universal Credit until someone is aged 22, with the savings reinvested into work support and training opportunities.

And we will support employers to recruit and retain more disabled people and people with health conditions through our Keep Britain Working review, led by the former boss of John Lewis, Sir Charlie Mayfield.

The second objective of our plans is to protect those who cannot work.

Those with the most severe, life-long conditions that will never improve and who can never work will have their Universal Credit protected – including young people aged under 22.

And we will guarantee they will never be reassessed in future, removing totally unnecessary stress, anxiety and uncertainty.

To improve trust, we will also fundamentally overhaul our safeguarding approach to ensure all our processes and training are of the highest possible quality and to protect and support vulnerable people.

Our third objective is to focus Personal Independence Payments on those with higher needs and to review the PIP assessment to ensure it is fair and fit for purpose.

I know the concerns that have been raised about our proposals. I am listening carefully to all the points people raise.

But 9 out of 10 people claiming PIP at the point when the changes come into force in November 2026 will not be affected by the end of the Parliament.

And even with the changes we are making…

… there will still be 750,000 more people receiving PIP by the end of this Parliament than there were at the start.

… and spending will be £8 billion higher than it is now: rising faster than GDP, and faster than spending on public services.

In making our changes, we are preserving PIP as a vital cash benefit that makes a contribution towards the extra cost of living with a disability. [Political content removed]

We are consulting on how best to support those who will no longer be eligible, including so their health and care needs are met.

We will improve the experience of those going through the PIP assessment, switching back to more face-to-face assessments and recording them as standard.

And we have begun the first review of the PIP assessment, in more than a decade – including the descriptors, and in consultation with disabled people and the organisations that represent them - to ensure it is fair and fit for purpose.

Taken together, our measures will reform the system to support those who can work to do so, to protect those who cannot, and to help ensure our welfare state lasts for generations to come.

I want to finish by saying this.

When I travel around the country, I know the places with the highest levels of economic inactivity and the largest number of people on sickness and disability benefits…

… are the same places with the worst health, lowest life expectancy and fewest opportunities.

The villages, towns and cities, especially in parts of the Midlands and North whose economies have still not recovered from the 80s and 90s, where economic demand remains weakest.

Places that are full of talent and ambition but which need the investment - in jobs, infrastructure, skills, and public services - to build a better life for themselves and their communities.

People in this country rightly demand change.

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They need real hope built on real solutions.

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Change of this scale isn’t easy.

But it is possible.

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That we will create the jobs, opportunities and public services people want and deserve.

Because a future dependent on benefits alone is not good enough for people in Blackpool, Birkenhead or Blaenau Gwent.

I am confident we will deliver.

Because all the evidence shows hundreds of thousands of sick and disabled people want to work.

When they have a government that is on their side and provides the right support, they get work.

And that this can transform their lives.

Our task is urgent.

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So now let’s get on with the job.

ENDS