Latest news with #LizKendall
Telegraph
15 hours ago
- Business
- Telegraph
Labour vowed to take axe to Civil Servants – they're hiring thousands more
Thousands more civil servants have been appointed in the last year, despite Sir Keir Starmer's pledge to tackle 'flabby' Whitehall. Official statistics have revealed that 12 government departments have seen an increase in the number of full-time employees in the year to March 2025. The overall increase in the number of mandarins was more than 6,000, to 516,150, according to government data released on Wednesday. The overall headcount represents the highest level of employed civil servants in almost two decades. The department with the largest rise in the number of employees was the Department of Work and Pensions (DWP), which had a net increase of over 2,700 civil servants. The department, under Liz Kendall, has been partly responsible for putting forward the welfare reforms that were watered down after a backbench rebellion. The DWP is the second-largest government department after the Ministry of Justice (MoJ), so the headcount increase represents a 3 per cent increase. The MoJ hired just 90 additional civil servants last year. The Department for Business and Trade (DBT) has hired an additional 1060 civil servants – an increase of over 11 per cent on the previous year. It is understood that a bigger workforce was enlisted to deal with the department's trade deal negotiations, the industrial strategy and the workers' rights legislation. The increase is also said to partly be down to the ongoing work merging the Department for International Trade and the Department for Business, Energy and Industrial Strategy. The Prime Minister vowed in March that the size and cost of the Whitehall would be slashed under his premiership, warning that the state had become 'overcautious and flabby'. The Cabinet Office, headed up by Pat McFadden – a key proponent of slimming down the state – announced in April that 2,100 of its jobs will be cut or moved to other parts of the Government in the next two years. But last year the department hired an additional 760 civil servants, over a third of the number of roles they have said they will cut in the next 24 months. It is understood that the Cabinet Office increases were as a result of recruitment from the fast stream careers programme, and hiring civil servants for the infected blood compensation authority. The Cabinet Office is also responsible for policy relating to the European Union and the Government's car service, both of which were under different departments before the general election. The Civil Service statistics released on Wednesday cover the final four months at the end of Rishi Sunak's premiership, as well as the first nine of Sir Keir's. The statistics also revealed that the Ministry of Defence has lost almost 2,000 civil servants in the last year. The whole Government is under pressure to cut its workforce, after the Chancellor set out plans to slash civil service budgets by 15 per cent by 2030. Rachel Reeves said in March that she was 'confident' that 10,000 civil service roles can be cut, which she specified would be 'back office jobs'. As part of its efficiency drive, Sir Keir announced that NHS England, the quango in charge of running the health service. He vowed in March to cut needless government spending, by reducing the number of arms length bodies and regulations. The move was compared to Elon Musk's drive for efficiency in the US federal government, and jokingly referred to as his 'Project Chainsaw'.
Telegraph
a day ago
- Business
- Telegraph
How Denmark raised its retirement age without sparking protests
Planning an early retirement? You're out of luck if you live in Denmark. The Nordic country recently raised the state pension age to 70, a change that will kick in by 2040. The new legislation means that Danes are on track to become the oldest workers in Europe. It is just the latest in a series of increases after the Scandinavian country linked its retirement age to life expectancy in 2006 and legislated that it should be reviewed every five years. The welfare agreement of 2006 attempted to protect the country's finances and set pensions spending on a sustainable path. Without action, there were concerns that the cost of the state pension could spiral out of control as Danes lived longer but paid the same amount of lifetime taxes. It could be a glimpse into Britain's future. Here, the state pension age is currently 66 and scheduled to gradually rise to 68 by 2046. But calls are growing louder for the retirement aged to be raised further and faster. Without action, the cost of the expensive triple lock on pensions will balloon and force either higher taxes or cut backs elsewhere. 'I don't think we can really afford to [wait to the 2040s], to be frank,' Nigel Farage, the Reform UK leader, told The Telegraph last week. 'If there is a sudden economic miracle, then it might change that. But it does not look to be happening any time soon.' Liz Kendall, the Work and Pensions Secretary, announced a review into the state pension age last week in an effort to address the problem. 'There's kind of cross party consensus that ... we need to increase the state pension age to deal with the rising cost of the state pension system,' says Heidi Karjalainen, an economist at the Institute for Fiscal Studies. Such changes are controversial. In 2023, Jeremy Hunt, the then chancellor, shelved plans to lift the state pension age after a slump in life expectancy left ministers struggling to justify the change. In France, attempts to raise the retirement age have bought people out onto the streets in the thousands. Raising the retirement age to 70 has not led to fiery demonstrations on the streets of Copenhagen, however. The increase 'hasn't come as a surprise to anyone' given the 2006 legislation, says Damoun Ashournia, the chief economist at the Danish Trade Union Confederation. Denmark is one of nine OECD countries that currently links the retirement age to average life expectancy, effectively maintaining a fiscal brake on pension spending. The Nordic nation legislates that an average of 14.5 years should be spent in retirement. For every year increase in life expectancy in Denmark, the retirement age also rises by one year. Wouter De Tavernier, a pensions economist at the OECD, says the link prevents governments having to rerun difficult political debates every five or 10 years and helps countries maintain financial stability with their pensions system. 'It avoids having to restart the same discussions over and over again, and therefore making long term financial sustainability dependent on political decisions and political calculations about what might or might not be popular in the elections.' Yet even in Demark, there are limits. 'When we ask workers, the vast majority, 75pc, are against this increase,' says Ashournia. 'They worry that they won't be able to work until the retirement age, when we increase it by such an amount.' Karjalainen says asking people to retire at 70 is as much a psychological challenge as it is an actual problem. It is a new decade and one that feels far older to most people. 'I think the higher the state pension age goes, just kind of psychologically, people think of someone aged 65 and someone aged 70 as kind of very different types of people,' she says. However, it is not just about what voters will bear. There are physiological differences between 65 and 70. For instance, in the UK the rate of dementia stands at 1.7pc for those aged 65 to 69 years old but climbs to 3pc for 70 to 74-year-olds. 'We can't just keep increasing the retirement age forever, because it becomes unrealistic for workers to work for so long,' says Ashournia. The Danish Trade Union Confederation now wants the 2006 agreement to be softened, with the retirement age only rising by nine or 10 months for every year the life expectancy increases. Mette Frederiksen, Denmark's prime minister, has conceded that the policy may be at its limit. 'We no longer believe that the retirement age should be increased automatically,' she said in August last year. 'You can't just keep saying that people have to work a year longer.' Britain's costly dilemma In the UK, the bigger concern in policy circles is whether the Government can afford not to make people retire at 70. Spending on the state pension is only forecast to grow as a result of the costly triple lock, which guarantees annual increases by the highest of either average earnings growth, inflation or 2.5pc, whichever is highest. The UK is estimated to have spent 4.9pc of its GDP on the state pension for the 2024/25 financial year. On the current trajectory, the cost is forecast to reach 6.3pc of GDP by 2054/55. A 2023 independent report into the state pension age carried out by Baroness Rolfe recommended that the government should cap pension spending at 6pc of GDP to prevent overspending. It recommended raising the state pension age to 69 to ensure financial sustainability. However, a later retirement age raises questions about fairness. While the average life expectancy in the UK stands at 78.8 years for men and 82.8 years for women, there is significant variation across the country. Men in Blackpool and Glasgow city have some of the lowest rates of life expectancy in the UK, at 73.1 years and 73.6 years respectively. Any move to bring the state pension age in line with Denmark is likely to be met with significant pushback in the UK. Yet De Tavernier believes retirement at 70 will eventually reach Britain if life expectancy continues to rise. 'I think the discussion is more about in which time frame this will happen, and how do you get there? Do you get there by politics deciding on a time frame? Do you get there by linking a retirement age to life expectancy?' he says. The nation's pensions are heading towards a 'big fiscal challenge' that needs to be addressed, says David Sinclair, the chief executive of the International Longevity Centre. 'The fact that our politicians are too scared to talk about what retirement is like, and how we might need to be supporting work longer, and how we might need to be healthier, just feels like an utter failure of our entire political classes.' Ashournia says 'the vast majority' of Danish Trade Union Confederation members 'want to be working until the retirement age [and] even longer, if possible.' 'But today, two thirds retire prior to the retirement age because they cannot continue, or they choose to retire because they have saved sufficient funds. So the challenge for us is: how do we ensure that workers are able to continue to work until the retirement age – that's under the current retirement age, which is 67 today. 'When we increase the retirement age in the future, this problem is just going to be become bigger.'
Telegraph
2 days ago
- Business
- Telegraph
Liz Kendall faces fresh benefits backlash
Liz Kendall is facing backlash over her planned benefit cuts after MPs warned that slashing universal credit (UC) payments would push more disabled people into poverty. On Tuesday, the influential Work and Pension Committee said it was alarmed by Ms Kendall's proposed changes to UC, which will see top-up payments to new claimants who are disabled halved from £423.27 to £217.26 a month from 2026. The committee, chaired by Labour MP Debbie Abrahams, warned that slashing the benefits risked forcing more disabled people into poverty. The reforms risk reducing payments for people with severe mental health conditions, the committee said, because their condition may not qualify for a full UC payment. Ms Abrahams said that the Government's own analysis showed that the reduction in the UC health top-up payment would push approximately 50,000 people into poverty by the end of the decade. However, Helen Whately, shadow work and pensions secretary, said: 'Politicians should be trying to get welfare spending under control, not handing out even more cash. It's a sobering fact that the British Government spends more on sickness benefits than on defence – this cannot be allowed to continue.' UC is Britain's main benefit and it replaced a myriad of other payments, such as jobseekers' allowance, child tax credits and housing benefits in 2012. Claimants who are disabled can claim a top-up payment in addition to standard UC, but the Government is hoping to change this amid fears too many people are claiming it on spurious grounds. Welfare battle Ms Kendall had been battling rebels from her own party to push through a watered-down version of her welfare reforms. Following a government policy reversal and a series of major concessions to Labour rebels, it eventually passed at the start of the month. As part of her reforms, Ms Kendall, who is the Work and Pensions Secretary, has sought to address Britain's ballooning welfare spending, which is estimated to reach £378bn by 2029-30 – almost double the £210bn paid out to claimants in 2013-14. Yet concessions made to the bill are expected to wipe out a third of the £5bn they had been expected to save taxpayers, piling further pressure on the Treasury. Ms Kendall warned earlier this month that once workers start receiving the health element of UC, only 3pc a year manage to get off the benefit again. Despite this, Ms Abrahams said: 'There are still issues with these welfare reforms, not least with the cut in financial support that newly sick and disabled people will receive.' Ms Abrahams has been a staunch critic of the Government's welfare reforms bill alongside other Labour rebels, including Meg Hillier and Rachael Maskell, who had pushed for changes to the bill. The fallout over the bill is far from over, as Ms Abrahams told Sir Kier Starmer at the Liaison Committee that the 'fear and anxiety' felt by disabled people following the Government's welfare reform bill 'cannot be underestimated'. In a tense exchange between the Left-wing MP and the Prime Minister last week, Ms Abrahams said the reforms were 'far removed from Labour values' and warned that the Government 'must do better'. A recent report from the Office for Budget Responsibility warned that the UK's national debt is on track to spiral from just under 100pc of GDP to 270pc in the next 50 years if nothing is done to reduce the benefits bill. A government spokesman said: 'Our welfare reforms will support those who can work into jobs and ensure there is always a safety net for those that need it. The impact assessment shows our reforms will lift 50,000 children out of poverty – and our additional employment support will lift even more families out of poverty. 'The reforms will rebalance universal credit rates to reduce the perverse incentives that trap people out of work, alongside genuinely helping disabled people and those with long-term health conditions into good, secure work – backed by £3.8bn in employment support over this parliament.'
Telegraph
3 days ago
- Business
- Telegraph
Millions to lose up to £18,000 in savings from pension reforms
Millions of workers in their 50s face losing up to £18,000 if the Government accelerates a rise in the state pension age, a leading wealth manager has warned. Rathbones, which manages the savings of older people, said introducing a state retirement age of 68 earlier than planned threatened to hit people aged 51 the hardest, while people aged 52 and 53 would also lose out. The Government is exploring whether to raise the state pension age to 68 more quickly. It is currently set to be phased in from 2044, but Liz Kendall, the Work and Pensions Secretary, is considering bringing this forward five years to 2039 as part of the Government's pensions review. According to Rathbones, those aged 51 would lose an entire year's worth of state pension payments if the timetable is accelerated. That would be worth £17,774, assuming today's state pension of £12,000 increases by the so-called triple lock each year. Under the triple lock, the state pension rises by the highest of inflation, average wages or 2.5pc per year. Meanwhile, people aged 52 would miss out on £17,340 and those aged 53 would lose £16,918. Each of those age cohorts – 51, 52 and 53-year-olds – comprise some 800,000 people, meaning around 2.4 million risk missing out on significant five-figure sums. Rebecca Williams, from Rathbones, said Britain's ageing population would put a growing strain on the public finances. She said: 'With longevity increasing and population pressures mounting, future generations appear set to face a less generous state pension regime than that enjoyed by many of today's retirees. 'The situation appears particularly precarious for those in their early 50s who face the real prospect of missing out.' The state pension age is currently 66 and will rise to 67 by 2028. Spending increasing Raising the state pension age is likely to prove politically challenging. Previous pension reviews recommended increasing the pension age in the late 2030s, but the move was not put into legislation. However, financial pressure is growing, and Ms Kendall acknowledged when launching her review that she was 'under no illusions' about the scale of the challenge. Estimates from the Office for Budget Responsibility (OBR) show that state pension payments will amount to 5.1pc of GDP this year, up from 3.6pc two decades ago. That bill will keep on mounting, rising to almost 8pc by the 2070s. Overall spending on pensioners, including the state pension, housing benefit and winter fuel payments but not counting healthcare costs, came to £150.7bn last year and will rise to £181.8bn by the end of the decade, according to the OBR. The Government has sought to limit the increase by restricting the share of pensioners who receive winter fuel payments. However, it was forced into a partial about-turn after a backlash from voters and Labour's own backbench MPs, showing the difficulties of reining in benefits spending. It means there is increasing pressure from the public finances to find ways to save money for the long term, potentially including further increases in the pension age. The Institute for Fiscal Studies estimates that raising the pension age by one year saves the Government around £6bn per year. Nigel Farage, leader of Reform UK, last week said the state of the public purse means the pension age should be increased more rapidly, in line with life expectancy. 'I don't think we can really afford to [wait to the 2040s], to be frank,' Mr Farage said. 'If there is a sudden economic miracle, then it might change that. But it does not look to be happening any time soon.' The International Monetary Fund last week said that if the Government stuck to its promise not to raise taxes on 'working people', then it would have to consider reining in spending, 'to align better the scope of public services with available resources'. 'In particular, the triple lock could be replaced with a policy of indexing the state pension to the cost of living,' the global economic watchdog said.
Daily Mail
4 days ago
- Health
- Daily Mail
Hating your boss is 'not a mental health condition', says ex-high street chief amid fears workplace problems are being 'overmedicalised'
Hating your boss is 'not a mental health condition', employees have been warned. The former chairman of John Lewis has raised concerns amid the 'overmedicalisation' of workplace problems. It comes as one in five people of working age have a health condition that affects their job and there are 2.8million people inactive due to ill health. This is up from 2.1million since before the Covid pandemic - though the numbers have been steadily rising over the years. The ex-high street chief, Sir Charlie Mayfield, has now been appointed by Liz Kendall, the work and pensions secretary, to come up with plans to stop workers leaving their jobs because of poor health. Mr Mayfield's report is due this autumn. He told The Sunday Times: 'The last thing I wish to do is trivialise [mental health conditions] but I agree that things do get over-medicalised. 'That's not to say there aren't medical issues that need to be dealt with through proper clinical medical interventions, but there's a lot more that can be done through the workplace and through encouraging discussion and relationships and processes that encourage that. 'It might be better to say: "What's making you anxious?" Because then we can do something about that. And how do you deal with it if you've got [an employee with a] "I hate my boss syndrome"? Well, we can do something about that. We can say "Is it the case that your boss is hateful?", in which case, that's probably an issue that we should figure out how we deal with.' Mr Mayfield added there were also the possibility the boss was 'quite legitimately doing what they should be doing' meaning it is 'not hateful behaviour' and in fact might be 'what bosses are meant to do'. He went on to say bosses should be routinely in contact with employees when they are signed off to help support their return to work. Sick notes also create an 'impregnable barrier' between employer and employee, according to the former high street mogul, with those in charge often too scared of contacting staff for fear of 'causing offence'. The 58-year-old believes lessons can be learnt from the Netherlands where there is a mandatory six-week intervention meeting requiring employee, employer and occupational health to agree a return-to-work plan with two-week monitoring cycles. He pointed out that statistically the longer someone is away from work, the harder it is to get back and the less likely that person is to do so. Mr Mayfield said it should become normal that people are contacted when they're off sick and that while some organisations are ready to do this, most are not. The former John Lewis chief pointed to a fear of individuals disclosing health conditions and also line managers not wanting to offend people about something obviously personal to them. He also offered 'keeping in touch days' like those used by women on maternity leave as a solution - to help solve the disconnection between employer and employee, improving return-to-work outcomes. Flexibility is also key - particularly among the over 50s - as a way to boost participation, according to Mr Mayfield.
