Latest news with #WorkAndPensions
Yahoo
a day ago
- Business
- Yahoo
‘Perverse' benefits system is unsustainable, warns Liz Kendall
Liz Kendall has said 'perverse incentives' in the benefits system must be tackled as she resists pressure from Labour rebels to water down her welfare reforms. The Work and Pensions Secretary said the Government needed to take 'urgent action' to get people into work and warned that the rise in claims for personal independence payment (Pip) was 'not sustainable'. In a letter to Debbie Abrahams, the chairman of the Commons work and pensions select committee, Ms Kendall said: 'Reforms are needed now to make the system sustainable, while supporting those people with the greatest needs. 'Our plan to rebalance the rates in Universal Credit will remove perverse incentives that trap people in benefit dependency.' The comments come as Ms Kendall's plans to cut personal independence payment (Pip) and the health element of universal credit face mounting criticism from Labour MPs. Last month the MPs' committee urged Ms Kendall to delay the implementation of her reforms, citing concerns about 'the impact of the proposed cuts in universal credit health support on employment, poverty and health outcomes'. Backbenchers have also been calling for the proposals to be dropped. Dismissing their concerns, Ms Kendall wrote: 'We urgently need welfare reform to give people a better future – to stop people from falling into inactivity, restore trust and fairness in the system.' As it stands, those who are permanently signed off work because of sickness and claim universal credit health top up receive more than twice as much as those on the basic level of universal credit. Those signed off sick do not need to look for work, while those on basic universal credit do. Ms Kendall and others argue that this encourages people to claim sickness benefits and puts them off trying to find work. A report from the Resolution Foundation found that 'changes to the benefits system over the last decade have strengthened the incentive to claim incapacity and disability benefits'. The changes to the welfare system include stricter eligibility for claiming Pip and reducing payments for new claimants of the health element of Universal Credit. They are forecast to save £5bn by 2030. The Work and Pensions Secretary said the reforms were necessary as the current rise in Pip cases was outpacing the increase in disability prevalence. Even after changes to disability benefits, the number of people on Pip is still forecast to grow by 750,000 by the end of the parliament, according to government estimates. The cost of Pip is poised to rise from £15bn before the pandemic to £37bn in real terms by the end of the decade, while the overall cost of sickness and disability benefits is expected to climb to £100bn. Pip is the main non-means-tested benefit for those with health conditions or disabilities, with payments of up to £9,500 a year to help people with living costs and getting around. 'With Pip caseload and costs forecast to continue rising, reforms are needed now to make the system sustainable, while supporting those people with the greatest needs,' said Ms Kendall. Under plans announced in March, the Government will tighten the eligibility criteria for people to claim Pip. A separate but linked concern are worries about the high level of unemployed young people. The latest figures from the Office for National Statistics show that 923,000 people aged between 18 and 24 were not in employment, education or training (Neet) in between January and March 2025. There are concerns that many will find themselves stuck on benefits without help. Alison McGovern, the employment minister, told the work and pensions committee on Wednesday: 'The situation for young people – well, it's a big worry for me at the moment.' Ms McGovern added that the high number of Neets meant there were 'nearly one million young people effectively on the scrapheap. They need a start, they need a chance for a career'. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
a day ago
- Business
- Telegraph
‘Perverse' benefits system is unsustainable, warns Liz Kendall
Liz Kendall has said 'perverse incentives' in the benefits system must be tackled as she resists pressure from Labour rebels to water down her welfare reforms. The Work and Pensions Secretary said the Government needed to take 'urgent action' to get people into work and warned that the rise in claims for personal independence payment (Pip) was 'not sustainable'. In a letter to Debbie Abrahams, the chairman of the Commons work and pensions select committee, Ms Kendall said: 'Reforms are needed now to make the system sustainable, while supporting those people with the greatest needs. 'Our plan to rebalance the rates in Universal Credit will remove perverse incentives that trap people in benefit dependency.' The comments come as Ms Kendall's plans to cut personal independence payment (Pip) and the health element of universal credit face mounting criticism from Labour MPs. Last month the MPs' committee urged Ms Kendall to delay the implementation of her reforms, citing concerns about 'the impact of the proposed cuts in universal credit health support on employment, poverty and health outcomes'. Backbenchers have also been calling for the proposals to be dropped. Dismissing their concerns, Ms Kendall wrote: 'We urgently need welfare reform to give people a better future – to stop people from falling into inactivity, restore trust and fairness in the system.' As it stands, those who are permanently signed off work because of sickness and claim universal credit health top up receive more than twice as much as those on the basic level of universal credit. Those signed off sick do not need to look for work, while those on basic universal credit do. Ms Kendall and others argue that this encourages people to claim sickness benefits and puts them off trying to find work. A report from the Resolution Foundation found that 'changes to the benefits system over the last decade have strengthened the incentive to claim incapacity and disability benefits'. The changes to the welfare system include stricter eligibility for claiming Pip and reducing payments for new claimants of the health element of Universal Credit. They are forecast to save £5bn by 2030. The Work and Pensions Secretary said the reforms were necessary as the current rise in Pip cases was outpacing the increase in disability prevalence. Even after changes to disability benefits, the number of people on Pip is still forecast to grow by 750,000 by the end of the parliament, according to government estimates. The cost of Pip is poised to rise from £15bn before the pandemic to £37bn in real terms by the end of the decade, while the overall cost of sickness and disability benefits is expected to climb to £100bn. Pip is the main non-means-tested benefit for those with health conditions or disabilities, with payments of up to £9,500 a year to help people with living costs and getting around. 'With Pip caseload and costs forecast to continue rising, reforms are needed now to make the system sustainable, while supporting those people with the greatest needs,' said Ms Kendall. Under plans announced in March, the Government will tighten the eligibility criteria for people to claim Pip. A separate but linked concern are worries about the high level of unemployed young people. The latest figures from the Office for National Statistics show that 923,000 people aged between 18 and 24 were not in employment, education or training (Neet) in between January and March 2025. There are concerns that many will find themselves stuck on benefits without help. Alison McGovern, the employment minister, told the work and pensions committee on Wednesday: 'The situation for young people – well, it's a big worry for me at the moment.' Ms McGovern added that the high number of Neets meant there were 'nearly one million young people effectively on the scrapheap. They need a start, they need a chance for a career'.
Sky News
21-05-2025
- Politics
- Sky News
Politics latest: Keir Starmer announces U-turn on winter fuel payments
Minister defends welfare reforms, saying the system is currently 'not sustainable or fair' Liz Kendall has defended welfare reforms, and said that "no responsible Labour government" could leave the system unchanged. The work and pensions secretary has been addressing people at the Royal Institution in London this morning. She said: "No responsible Labour government can resile from taking decisions because they are too difficult, because this is not good enough for the people we came into politics to serve. "So, we will reform the welfare state." Kendall highlighted how welfare was created when life expectancy was 65, whereas now it is around 80. "One in seven babies born today is likely to live to 100", she said. "Back then, disability was the exception, now one in four of us self-reports as disabled." She went on: "The number of people on the health top up of universal credit is set to rise by 50% to 3 million by the end of the decade, and the number of people on personal independence payment (PIP) 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," she added. Populist politics won't deliver the change people want Kendall said the current system "is not sustainable and fair" for taxpayers, and said reform is needed so it "lasts for generations to come". She added that she is "listening carefully to all the points people raise" and that she is aware of "the concerns raised about the proposals". Watch: Beth Rigby explains welfare reforms made earlier this year Kendall also pointed out that 90% of those claiming PIP when the changes come into effect in November next year will "not be affected by the end of the parliament". Defending the reforms, Kendall also hit out at "populist politics". She said: "People in this country rightly demand change, but populist politics, the politics of division and easy but empty solutions won't deliver the change people are crying out for. "They need real hope, built on real solutions. And that is what this Labour government is doing." She concluded that change "of this scale isn't easy, but it is possible".
Sky News
21-05-2025
- Politics
- Sky News
Politics latest: Keir Starmer announces changes will be made to winter fuel payments cut
Minister defends welfare reforms, saying the system is currently 'not sustainable or fair' Liz Kendall has defended welfare reforms, and said that "no responsible Labour government" could leave the system unchanged. The work and pensions secretary has been addressing people at the Royal Institution in London this morning. She said: "No responsible Labour government can resile from taking decisions because they are too difficult, because this is not good enough for the people we came into politics to serve. "So, we will reform the welfare state." Kendall highlighted how welfare was created when life expectancy was 65, whereas now it is around 80. "One in seven babies born today is likely to live to 100", she said. "Back then, disability was the exception, now one in four of us self-reports as disabled." She went on: "The number of people on the health top up of universal credit is set to rise by 50% to 3 million by the end of the decade, and the number of people on personal independence payment (PIP) 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," she added. Populist politics won't deliver the change people want Kendall said the current system "is not sustainable and fair" for taxpayers, and said reform is needed so it "lasts for generations to come". She added that she is "listening carefully to all the points people raise" and that she is aware of "the concerns raised about the proposals". Watch: Beth Rigby explains welfare reforms made earlier this year Kendall also pointed out that 90% of those claiming PIP when the changes come into effect in November next year will "not be affected by the end of the parliament". Defending the reforms, Kendall also hit out at "populist politics". She said: "People in this country rightly demand change, but populist politics, the politics of division and easy but empty solutions won't deliver the change people are crying out for. "They need real hope, built on real solutions. And that is what this Labour government is doing." She concluded that change "of this scale isn't easy, but it is possible".
Sky News
21-05-2025
- Politics
- Sky News
Politics latest: Keir Starmer to face Kemi Badenoch at PMQs as inflation jumps to 3.5%
Minister defends welfare reforms, saying the system is currently 'not sustainable or fair' Liz Kendall has defended welfare reforms, and said that "no responsible Labour government" could leave the system unchanged. The work and pensions secretary has been addressing people at the Royal Institution in London this morning. She said: "No responsible Labour government can resile from taking decisions because they are too difficult, because this is not good enough for the people we came into politics to serve. "So, we will reform the welfare state." Kendall highlighted how welfare was created when life expectancy was 65, whereas now it is around 80. "One in seven babies born today is likely to live to 100", she said. "Back then, disability was the exception, now one in four of us self-reports as disabled." She went on: "The number of people on the health top up of universal credit is set to rise by 50% to 3 million by the end of the decade, and the number of people on personal independence payment (PIP) 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," she added. Populist politics won't deliver the change people want Kendall said the current system "is not sustainable and fair" for taxpayers, and said reform is needed so it "lasts for generations to come". She added that she is "listening carefully to all the points people raise" and that she is aware of "the concerns raised about the proposals". Watch: Beth Rigby explains welfare reforms made earlier this year Kendall also pointed out that 90% of those claiming PIP when the changes come into effect in November next year will "not be affected by the end of the parliament". Defending the reforms, Kendall also hit out at "populist politics". She said: "People in this country rightly demand change, but populist politics, the politics of division and easy but empty solutions won't deliver the change people are crying out for. "They need real hope, built on real solutions. And that is what this Labour government is doing." She concluded that change "of this scale isn't easy, but it is possible".
