Universal Credit Bill

2nd reading & Committee negatived & 3rd reading
Tuesday 22nd July 2025 Lords Chamber

Second Reading (and remaining stages)

18:17

Moved by

[Baroness Sherlock]

That the Bill be now read a second time.

Northern Ireland legislative consent sought.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, on top of the usual joys of a debate such as this, we are blessed today by the unusual combination of a maiden and a valedictory. I look forward very much to the maiden speech of the noble Baroness, Lady Shawcross-Wolfson, but I am very much touched with sadness that we will hear the valedictory speech of my noble friend Lady Bryan of Partick. This is an important debate for such important occasions.

This Universal Credit Bill forms part of the Government’s reforms to our social security system. Our welfare state sits alongside the NHS as a key pillar of our society. Both represent the principle that, when our people need help, they should get it. This Government’s commitment to both these pillars is absolute, but that commitment cannot mean, in either case, that reform is never possible.

I do not think that many noble Lords would disagree that some reform is needed. We have a lower rate of employment today than we had before the pandemic, and progress in closing the disability employment gap has stalled. One in eight of all our young people is not in education, employment or training. Some 2.8 million people are now out of work for long-term sickness. The number of people claiming health-related benefits with no requirement to work has increased since 2019-20 by 800,000—that is 45%. This is not just about worsening health. Claims for these benefits have been rising far faster than the overall prevalence of self-declared health conditions. So things have to change.

One problem is the structure of our current system. At present, everyone presenting for out-of-work support is put in one of two categories: they are classed as “can work” or “can’t work”. Having created this divide, the system reinforces it financially. Someone labelled as “can work” is expected and supported to find a job, and given £92 a week to live on in the meantime—less if they are aged under 25. Someone classed as “can’t work” is given more than twice as much money but little or no help to take any steps towards work.

This is an unhelpful binary when we know there are hundreds of thousands of people claiming health and disability benefits who are ready for work now, if the right job or support were available. The system is failing them and failing taxpayers. This Bill addresses the problem by rebalancing universal credit, while protecting those we do not ever expect to work from reassessment. We will underpin this by investing record amounts in employment support for sick and disabled people.

These changes are based on three rules: if you can work, you should; if you need help to get into work, the Government should give it to you; and if you cannot work, you should be supported to live with dignity. Crucially, this Bill is part of a wider package of reforms that includes that record investment in employment support for sick and disabled people, totalling £3.8 billion over this Parliament. We have published draft regulations on our right to try guarantee, so that work, in and of itself, will never lead to a benefits reassessment, to give people the confidence to try out work. We are delivering the biggest reforms to employment support in a generation, overhauling jobcentres to create a new jobs and careers service, delivering our youth guarantee, and joining up work, health and skills support at a local level. This is on top of investing billions in the NHS and moving to create more good jobs across the country, plus reforming Access to Work so it is fit for the future and working with businesses on the role that they can play in creating healthy, inclusive workplaces. We want everyone who could work to have that opportunity, not least because work is the best route out of poverty.

I am aware that the amendment tabled by the noble Baroness, Lady Bennett of Manor Castle, refers to the impacts of the Bill. I look forward to hearing her contribution, and I will try to address her concerns in my closing speech. However, it is worth noting here that, after the recent changes, we estimate that the package of benefits changes announced at the Spring Statement, revised to account for the changes to the Bill, will lift 50,000 people out of poverty in 2029-30, something that I hope the whole House will welcome. These estimates do not include any impact that our record investment in employment support for sick and disabled people may have on poverty levels.

I turn to the specific measures in this Bill. Previous freezes to the universal credit standard allowance, and below-inflation increases, have built disincentives to work into the system. The Bill starts to address this by rebalancing payments in universal credit, including through the first ever sustained, above-inflation rise to the standard allowance, which the Bill introduces through Clause 1. This will be the largest permanent real-terms increase in the headline rate of an out of work benefit in decades. It will mean that a single person aged 25 or over will receive an income boost worth around £725 a year by 2029-30. This is balanced by a reduction in the health top-up of universal credit for most new claims, with the new rate set out in Clause 2. This clause, together with Schedule 1, also sets out to whom this lower rate will and will not apply.

Existing claimants, as well as those with severe, lifelong conditions whom we never expect to be able to work, and those nearing the end of life, will continue to receive the current, higher rate of top-up. For these groups, we will ensure, through the calculation in Clause 4, that the combined rate of their standard allowance and their health top-up in any tax year will rise at least in line with inflation between 2026-27 and 2029-30. That means that the income from these benefits will be protected, in real terms, for every year of this Parliament. Clause 3 makes it possible to offer this protection and to freeze the new lower health top-up rate by removing the relevant rates from the Secretary of State’s uprating review.

Clause 5 of the Bill mirrors the changes that we are making in universal credit through Clauses 1 to 4 in employment support allowance, while Clause 6, along with Schedule 2, makes the corresponding provisions for Northern Ireland. We believe that these changes strike the right and fair balance. They allow us to build a more proactive, pro-work system for the future, giving people the right incentives and support to build a better life. They also protect existing claimants who are already familiar with a certain level of support and who might find it particularly difficult to readjust if that were to change. They protect the most vulnerable, regardless of whether they are already claiming the top-up or will do in the years to come. We will always protect the most vulnerable, which is why Schedule 1 will ensure that people with severe, lifelong health conditions will never be reassessed, preventing unnecessary anxiety and giving them the dignity and security they deserve.

As I have said before, welfare reform is not easy and it never has been, but it is really important that we get it right. That is why we always said that we would listen to disabled people, their organisations and others as we deliver our reforms. The House will be well aware that this Bill originally set out to reform the personal independence payment, PIP, as well as universal credit. However, having listened carefully to a full range of opinions in the Commons and beyond, the Government have removed from the Bill the clauses relating to PIP. We will now look at PIP in the round, within the wider Timms review. We have already published the terms of reference for this review, and we expect it to conclude by autumn next year. It will be led by my honourable friend Sir Stephen Timms, my fellow Minister, and will be co-produced with disabled people and other stakeholders as we work to make PIP fit and fair for the future.

This Bill is an important part of our wider reforms to give disabled people and people with health conditions the same rights, chances and choices to work as everybody else. It rebalances universal credit to remove work disincentives, and it gives existing claimants the security and certainty they need, while providing new protections against unnecessary benefit reassessments for the most vulnerable. There is more work to be done, and much of that is already under way, but this Bill, to become the Universal Credit Act 2025, will take us another significant step closer to fulfilling our vision of giving everybody who can work a pathway to work. I beg to move.

18:26

[Viscount Younger of Leckie (Con)]

My Lords, I thank the Minister for outlining the details of the Bill with her usual clarity. It is regrettable that we have only a Second Reading of this Bill, with no further stages, as there is so much up for debate and so much progress which it is imperative to make, and which is simply now not being made, in the important area of welfare and on health and disability-related benefits. The Minister has given the House what sounds on the surface like a considered approach to the strategy on welfare, but the House will not be fooled. The truth is that this is a case of much fiddling while Rome burns.

I start by presenting the economic context with the facts. We are on course to spend £1 in every £4 of income tax on sickness benefits alone, more than we spend on our entire national defence. By the end of this decade, the cost will exceed £100 billion from a current £60 billion. This trajectory is unsustainable, and it puts at risk the long-term viability of the system itself.

The word “unsustainable” comes not from me but from the right honourable Alan Milburn, as a senior adviser in the DWP and an ex-Labour Secretary of State, following the cave-in by the Government to their Back-Benchers against the proposed £5 billion reduction to the welfare bill. He has cautioned against “running away” from reform—and, of course, he is right. On Friday, on “Any Questions?”, the Minister’s own DWP colleague, Minister Alison McGovern, said that progress “must be made” on welfare. However, following the removal of Clause 5, the Secretary of State Liz Kendall said in the other place that PIP is not about making savings but about making sure that this benefit is “fair and fit” for the future. That is a rapid and catastrophic moving of the goalposts. I presume that the Secretary of State has put in a call to the OBR to stand it down from scoring on any savings. I wonder what the Chancellor thinks about this.

As the Resolution Foundation has stated, the body from whence came Torsten Bell, our Pensions Minister, the Government have

“basically eradicated all of the savings they had hoped to make this decade”.

It is extraordinary that the report of the Timms review, to be co-produced by the disability groups, as the Minister said, will not be ready until Autumn 2026 —two years and three months after the general election and into the next Parliament. The Government will surely need to respond. By then, more than 3,000 people a day will have continued to sign on to PIP.

Will the government response at least be published at the same time as the review? Why is the review going to take so long? It is very likely that legislation will then be required. How long will this take? How long will it all take? These delays are a major issue for the Government; they are very damaging and very expensive.

As Kemi Badenoch said recently:

“28 million people in Britain are now working to pay the wages and benefits of 28 million others”.


She went on to say that this country is a welfare state supporting an economy. As a leader in the Times highlighted last week, this is one of the most serious issues stifling growth—the key driver for this Government, as we have been hearing. The noble Baroness the Minister, in her reply, will produce a riposte, I am sure, concerning the last 14 years. I hope she does, because it is a positive story.

The last Government made the hard choice to reform universal credit, replacing six benefits with one, leading to a system that proved 100% robust under the severe pressures of Covid in 2020-21, where the old system would undoubtedly have failed. We also generated an extra 4 million jobs between 2010 and 2024, and this should not be forgotten. This is a huge contrast to the current deteriorating macroeconomic backdrop, stemming directly from this Government’s decisions, and I will name a few: inflation remains above target, at 3.6%; payroll employment is down 0.6% compared to this time last year; vacancies are down by over 63,000 year on year; slack in the economy is widening; and debt now stands at 94% of GDP.

Behind the economics lies a deeper moral case for reform, and my noble friend Lady Stedman-Scott may expand upon this later. We commenced our PIP consultation in 2023. Why was this pulled by the Government in favour of their own, causing years—and I do mean years—of delays to change? This was surely ideologically driven and, in retrospect, another big error made by the Government.

Let me state an important point. On these Benches, we have consistently said and continue to emphasise, and it is also my personal viewpoint, that for those who genuinely need help, notably with a severe mental or physical condition or illness, the state—and by “the state”, I mean the taxpayer—should provide support. After all, we are a developed and civilised nation. But radical reform is needed, which the last Government started on the back of the Covid period. A measure of the current urgency is highlighted by the Centre for Social Justice, which states that a recipient of the highest level of sickness benefits earns £2,500 a year more than someone on the national living wage. We continue to believe that individual help is needed to aid those on sickness-related benefits into work, which is essential and urgent for a range of different benefit cohorts. What we need is not just money but targeted investment that works. Higher welfare spending is not always compassionate. It can trap people, stripping them of agency, of purpose and of independence. A life on benefits is not a life of dignity. Aspiration, work and opportunity confer meaning; dependency corrodes.

Let us speak plainly: the UK cannot sustain a situation any longer in which one in four people self-identifies as disabled. That is not compassion; it is category or descriptor creep. We risk draining the term of its meaning and its moral force. The welfare state must be focused, it must be functional and it must be fair. Trevor Phillips made an interesting recent observation in the Times. He said:

“In 1995, the Disability Discrimination Act marked a transition from what used to be called the ‘medical’ model of disability to the ‘social’ model”,


meaning that a disability was deemed to have become a “manifestation of human diversity”. The number of people who come under the description of disabled—and this is a very important point—has rocketed from one in 50 to one in four: that is 16 million inactive people. The cohort for benefit eligibility has ballooned from 600,000 in 1990 to 7.2 million today, and this partly explains why 47% of those who successfully self-declare disability between the ages of 16 and 65 do so for mental health or musculoskeletal reasons. This is why welfare reform is no longer a matter of political choice, and the Government know it: it is a matter of urgent national necessity.

Now, as alluded to by the Minister, we are told that £1 billion, plus a bit more from the last spending review, has been allocated to support people back into work, but is this serious structural reform or just surface-level spending? What is the breakdown of that allocation? How far will it go? Who will make the decisions? How much of it will reach front-line, human-facing interventions? Will the noble Baroness, in her winding up, give us more information on this? Will she at least say when the “right to try” SI will be debated? When is it likely to commence and be rolled out on the ground?

At last, I turn briefly to the Bill itself, which makes a damp squib look like the top-of-the-range firecracker. The easy decision for the Government, their decision, is the increase in UC rates. Then we have the severely watered-down LCWRA restrictions for new claimants from April 2026. And that is basically it. The Bill before us today, what remains of it, fails to take the bold, essential steps required to reduce dependency, bring down the welfare bill, empower PIP claimants and reform eligibility criteria. The Bill offers no credible strategy to reduce long-term demand on the system. What in the Bill helps to address the rise in the sick-note culture, the increasing ease with which people are signed off work with a fit note? Where is the reform to clinical accountability or the incentives to keep people engaged in the labour market? Perhaps the noble Baroness could address these points in her winding up.

I believe that the political fault-lines are now clear. Labour entered office decrying a fiscal hole, then reached for tax rises, not reform. Higher taxes were not inevitable. They were a choice, a preference, not a necessity. This Government, facing their own internal rebellion, as we have seen, have now retreated from reform altogether. However, the electorate sees through this paralysis. They know the real questions which remain unanswered. These are, briefly: who truly needs state support? How do we reduce dependency without punishing the vulnerable? And how do we ensure that systems designed to protect do not entrench disempowerment? These are the questions that the Bill fails to answer.

Nowhere is the gap clearer than in the Government’s abandonment of the PIP review and Clause 5. It was a crucial opportunity to reset eligibility, rebuild public confidence and ensure that the system is reaching the right people. Why was it quietly cancelled? We need structural reform now, reform that reduces dependency, narrows eligibility where appropriate and ensures that those in genuine need are protected and supported. Ministers appear unwilling to confront the hard trade-offs or to engage seriously with what rising dependency and spiralling costs mean for the future of the welfare state and the state of the national finances. I conclude with another sobering statistic. Benefit claimants in most member states in the OECD have fallen below pre-Covid levels. In the UK, they have increased, so welfare dependency is, unfortunately, a British disease.

I conclude on a more conciliatory note. I look forward to the valedictory speech of the noble Baroness, Lady Bryan, and to the maiden speech of my noble friend Lady Shawcross-Wolfson, who I suspect may highlight issues relating to work, welfare and the family, not least from her influential and authoritative period spent in No. 10.

18:38

[Baroness Tyler of Enfield (LD)]

My Lords, to say that this Bill, in its various incarnations, has had a bumpy ride would be something of an understatement. The Bill is now being rushed through Parliament at what feels like an indecent pace and now, having been assigned as a money Bill, it means that this Chamber cannot undertake its normal scrutiny. In short, the Bill has had neither proper consultation nor in-depth scrutiny. To be blunt, the whole parliamentary process has been shambolic, and I fear that this has seriously damaged trust with disabled people, including those with mental health problems, who have needlessly gone through turmoil.

I totally understand that the current welfare bill is unsustainably high and that reform is needed, but if the Government are serious about cutting welfare spending at source, they would also get serious about fixing health and social care without delay so as to tackle chronic ill health at its root, rather than start by trying to cut funding for carers and some of the most vulnerable.

Having made those general points, I will focus on two issues which give me real cause for concern. The first is mental health. The initial plans in the Bill when it was introduced would have had a devastating impact on people with mental health problems. Although I welcome the announcement of the Timms review of the PIP assessment, to which I will return, there remain fundamental flaws with the Government’s plans. The cut to the health element of universal credit, which remains, will mean that about 750,000 disabled people will miss out on about £3,000 a year by the end of the decade. This will include many people with mental health problems who find themselves too unwell to work.

These cuts to universal credit are supposed to be safeguarded by the new severe conditions criteria, which apply to people who meet a set of requirements including having a lifelong condition and being likely to satisfy the relevant criteria for the rest of their life. This will mean two things: first, that at least one of the descriptors of people’s conditions applies to them “constantly”; secondly, that they will have been given an official diagnosis by an NHS practitioner. I share the concern of many in the sector about the requirement for a descriptor to apply constantly because, for many mental health problems, even severe ones such as schizophrenia, people’s mental health can fluctuate. This sort of fluctuating condition also applies to people with severe conditions such as MS and Parkinson’s.

I am also concerned about the new NHS diagnostic requirement, as we know that many people with mental health problems can wait years to receive a diagnosis and many feel forced to receive or seek treatment outside the NHS because of very long waiting lists or inaccessible services. It just does not feel fair to penalise people who seek private diagnosis and treatment due to the inadequacies of the current NHS.

I share the concern expressed by some about the extent to which the Timms review into personal independence payments will be a genuinely co-produced endeavour. Despite welcome promises to work closely with disabled people on changes to the system, the way this Bill has been handled so far—and, frankly, the way it fell apart—demonstrates a clear lack of consultation with the people most affected. It is also unclear what obligations the Government will have to implement the review’s recommendations and whether they will need to be bound by the current spending envelope of the cuts we have already seen. Can the Minister give me an assurance that there will be proper parliamentary scrutiny, including full debates in both Chambers, following the publication of the Timms review?

I return to the Bill’s impact on unpaid carers. Given that PIP is a crucial gateway for carer’s allowance and other carer benefits and that 150,000 disabled carers receive PIP, it is vital that the Government provide a firm commitment that unpaid carers and organisations that represent them will be consulted and fully engaged with throughout the Timms review. This time, we really need to take the time to get it right.

What assurances can the Government give that the outcome of the Timms review will not lead to significant numbers of unpaid carers being put at risk of losing their own benefits entitlement? It is worth reminding ourselves that the original Bill would have resulted in 150,000 carers losing entitlement to carer’s allowance. I quote one carer: “The extra costs we faced as carers will not disappear if the health element is cut. For those of us like myself who are carers and disabled, this will be a double whammy”.

18:43

Amendment to the Motion

Moved by

[Baroness Bennett of Manor Castle]

At end to insert “but regrets the impact of the Bill, particularly with regard to age discrimination, the impact on people with high levels of need and mental health conditions, and the overall impact on rates and severity of poverty among people with disabilities, and notes the human rights concerns expressed by the United Nations Committee on the Rights of Persons with Disabilities.”

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Tyler. I echo her concerns about the way in which this is being rushed through procedurally and how its being declared a money Bill denies us the broader debate that we might otherwise be having. I thank the Minister for introducing the Bill, welcome the noble Baroness, Lady Shawcross-Wolfson, and express my sadness at the departure of the noble Baroness, Lady Bryan of Partick.

I begin, perhaps surprisingly, by agreeing with the Minister and the noble Viscount, Lord Younger, that we have a problem with ill health—but it is not a problem with providing benefits for ill health. The noble Baroness, Lady Tyler, referred to the delays and problems with NHS treatment and social care. I add that we are a deeply unhealthy society; we have food systems and housing of terrible quality, and problems with air quality, nature and the environment, low pay, and insecure work. All these things make people ill. We very much need to tackle those issues, but if we deny people enough money to live on and to be able to afford healthy food, that will not make them healthier. That is the basic reason for my regret amendment.

I have spent more time explaining what a regret amendment is in the past couple of days than I might have expected. I know that a lot of people are listening tonight, so it is worth stressing that the House of Lords has no power to stop or amend this Bill. A regret amendment is the strongest thing that I am able to do. Its practical effect is absolutely nothing, but I intend— I have tried to make sure everyone is aware of this—to put it to a vote, because it is really important that people out there who will be affected by this Bill have the chance to know that there are people supporting then. In the other place, 47 Labour MPs and many others indicated at Third Reading that they did not want this Bill to proceed.

The regret amendment notes the effects of the Bill on

“age discrimination, the impact on people with high levels of need and mental health conditions, and the overall impact on rates and severity of poverty among people with disabilities, and notes the human rights concerns expressed by the United Nations Committee on the Rights of Persons with Disabilities”.

That reflects the perspective of the Disability Rights UK briefing on the Bill, which I have widely circulated:

“Debt and poverty are already a fact of life for existing Disabled claimants of UC, with many unable to afford essentials such as food, energy and housing or the additional costs of disability. The cuts will exacerbate this grave situation even further, pushing people into deep poverty”.


I and many other noble Lords, I am sure, have received a flood of briefings from organisations representing disabled people, including Scope, Sense, the Cystic Fibrosis Trust, Parkinson’s UK, the Mental Health Foundation and Amnesty International. The last of those clearly identifies, as the UN did, that this is a human rights issue, as the regret amendment points out. The latest letter from the UN committee points out that this is going backwards, when it had already identified that there was a problem. Looking at what that means, recent research from the Trussell Trust and YouGov found that one in five people receiving universal credit and disability benefits now has been forced to use a food bank in the past month. What will that do to people’s health? How will that equip them to find work, if that is even a possibility?

There is a further joint briefing involving many of those organisations, as well as the Disability Benefits Consortium, the Trussell Trust, Citizens Advice, the Joseph Rowntree Foundation, the Child Poverty Action Group, the New Economics Foundation, Z2K, Turn2us, the MS Society and Carers UK. It highlights how the Bill as it stands means that the existing recipients of the health element of universal credit will not see their payments frozen but will also not feel most of the benefit of the £250 per year increase in the standard allowance, which the Minister and the Government have made much of. About 50,000 more disabled people and people in households with disabled people are predicted to be in poverty by 2030 as a result.

Perhaps the most pernicious part of this is the key Clause 2, which cuts the limited capability for work and work-related activity, or LCWRA, element of universal credit—generally known as the health element—and will affect more than 750,000 disabled people by £3,000 a year, an effect that will only continue to grow unless we get a future Government who are concerned about the rights of disabled people and basic humanity. That means effective age discrimination, since younger people are far more likely to be affected.

As Sense points out, if the people with complex needs whom it represents received £47 less in support each week, a quarter would be pushed into debt—often further debt—and one in five say they would be forced to go without essential support to basically live their lives. The Government claim, and the Minister said, that some people with terminal illness and lifelong conditions will be protected, but the impact assessment confirms that fewer than 10% of new claims would be saved by this. The Cystic Fibrosis Trust says that few of the adults it represents are likely to meet the severe conditions criteria,

“despite the fact that a typical person with cystic fibrosis on the health element of universal credit is someone who cannot walk 200 metres within a reasonable timescale, the majority of the time is at risk of voiding their bowels and/or bladder, and would spend a significant portion of their day performing their daily treatments”.

Those are the people the Bill explicitly targets for benefit cuts. If the Minister can tell me that they are going to be protected, I am interested to have that on the record, but that is not what charities that are experts in this area believe. Parkinson’s UK notes that it has legal opinions from two different experts concluding that the severe conditions criteria are likely to effectively prevent people with Parkinson’s getting the higher-rate health element.

I came into your Lordships’ House promising to share the voice of the voiceless. As I am sure many others have, I have received hundreds of emails from individual disabled people and their carers, setting out their situations. I am going to use just one, with permission, although I will not name the person to protect their and their family’s privacy. This woman is a former elected Labour councillor and former NHS professional. She is a carer for her young adult autistic son and a parent with multiple sclerosis. She says, “I am currently advocating for my son, who has applied for universal credit and is now undergoing the LCWRA assessment. Without me helping him, my son could not negotiate this system. Cutting the health element for these young people is wicked. This is how they end up on the streets when there is no family to support them. This generation has been shafted by the SEND system. Most did not achieve their potential due to unmet needs and lack of support in school. They are at higher risk of mental health issues; they are less likely to gain employment”. She notes that the first requirement of most job ads is excellent communication skills. She says, “My son is selectively mute. He is at an immediate disadvantage”. Can the noble Baroness, Lady Stedman-Scott, responding for the Official Opposition, confirm that, having listened to the speech by the noble Viscount, Lord Leckie, she agrees that this family needs the strongest possible support? I hope the noble Baroness can confirm that.

I conclude with remarks from this former Labour councillor, who said, “I am shocked and appalled at this proposal. It really will destroy lives”. I am sorry that I will not be able to respond individually to everyone who has emailed me; the volume is just too great. It is a collective testament to the fact that disabled people in our society are not feeling how Sir Keir Starmer told the Liaison Committee yesterday that he wants them to feel. They are not feeling secure and supported; they are feeling the opposite. I beg to move.

18:53

[Baroness Grey-Thompson (CB)]

My Lords, I declare my interests as president of the Local Government Association and a recipient of personal independence payment.

Like others, I have received many emails from people worried about the proposed changes and I am extremely concerned about how this narrative has played out in the media. Disabled people are being portrayed as benefit scroungers and a drain on society. Like others, I am disappointed that this has been made a money Bill. I recognise that the Bill is different from what His Majesty’s Government originally intended, due to a number of concessions. I am frustrated that Members in another place, when talking about PIP specifically, seem to have become confused, called it a not-in-work benefit and conflated it with the Pathways to Work Green Paper. It is not a benefit that is linked to whether you work. These fundamental inaccuracies do not help a reasoned debate about proposed changes.

I will briefly cover personal independence payment because it is integral to disabled people’s lives. It exists because society is inaccessible. Successive Governments have been slow to bring about the necessary changes to make society more inclusive, and disabled people face discrimination in all areas of their lives, whether that be in public transport, healthcare, education or employment, to name a few. People should be working, and I agree that the system is not sustainable in its current format. However, the extra costs of being disabled have not gone away. Scope has published a disability price tag and, even after taking PIP into account, the average household that includes at least one disabled adult or child faces extra costs of £975 per month. This figure is updated yearly.

Also of concern is the article in the i paper yesterday that reported errors in the way that PIP has been awarded that could cost the Department for Work and Pensions another £260 million. Ultimately, I believe we are missing a fundamental opportunity to look at the whole system, and I hope that Access to Work can be part of a wider review. What we are doing at the moment feels slightly too piecemeal.

The current Bill could develop a two-tier system. I repeat the quote from Disability Rights UK given by the noble Baroness, Lady Bennett of Manor Castle:

“Debt and poverty are already a fact of life for existing Disabled claimants of UC, with many unable to afford essentials such as food, energy and housing or the additional costs of disability. The cuts will exacerbate this grave situation even further, pushing people into deep poverty”.


There are some more positives with the Bill: the proposed increase to the standard allowance means that 2.3 million disabled people currently receiving universal credit will see the total amount they receive protected, but dramatic cuts to universal credit remain in the Bill, such as the restricted eligibility gateway of the severe conditions criteria. The Institute for Fiscal Studies and the Resolution Foundation think the latest concessions could mean the Government make no net savings by 2029-30.

I am concerned that the tone of the debate has generated quite a lot of victim blaming for disabled people. This is never more apparent than in the debate around Motability cars. I do not have a Motability car, but when I was learning to drive it was the only way I could afford to do so; public transport was even less accessible than it is now. The cost of insurance when you drive on hand controls is high—even more so if you are young. In the media it is being portrayed as a free car, which it is not, and we should remember that over the years it has considerably helped the car industry. There is a website, which was taken down over the weekend with promises to put it back up, to help people detect if “an annoying neighbour” is seen driving a new car. This is terrifying for a number of disabled people. It has been reported to the police; it feels like it crosses a line to incitement. Over the weekend, the replies on the website were despicable. This does not feel like a collaborative environment in which to have sensible debate.

The reality that is the system we have is too complicated and many disabled people find themselves unable to navigate the complex and lengthy processes. We do not have time today to consider it, but I would prefer a system that is better able to assess people’s needs, one that wastes less money with overturned appeals. I welcome the Minister’s comments, but now it is time to rebuild trust and have a genuine consultation. Can she give more information about how we can properly co-produce with disabled people? We have to find a better solution for everybody.

18:58

[Baroness Andrews (Lab)]

My Lords, I am grateful to my noble friend the Minister for introducing the debate with such clarity. I also look forward with great anticipation to the maiden speech of the noble Baroness, Lady Shawcross-Wolfson. I look forward in a slightly different sense—with great regret—to the valedictory speech of my noble friend Lady Bryan of Partick. We will miss her, and I am sorry that she is leaving the House.

I support the Bill because it has found, in a difficult time and in a contested situation, an honourable way through these very difficult issues. It has also started to correct the distortion that has developed between the standard provision and the health-related elements of universal credit. It has begun to nudge towards what we all want to see: a more effective way of supporting people into work. That is the great prize.

I also welcome the fact that the reference to PIP has been removed and that it will now be in the guardianship of Sir Stephen Timms. There could not be a better person to look at PIP; he is a man of huge integrity and respect. He is very likely to listen closely to the people he will involve, and he has already begun to involve disabled people. The tragedy, of course, could have been avoided—the past few weeks have been agonising for disabled people and their carers—if the decision had been taken earlier to do what Sir Stephen intends to do now: to bring them into the dialogue, so that they will help co-produce and co-own their future. It will be a more sustainable future because of their input.

The scale of the challenge has already been set out, not just by my noble friend the Minister but by the noble Viscount, Lord Younger. Between 2019 and March 2025, the number of working-age adults claiming disability rose from 3 million to 4 million—or, from one in 13 to one in 10—a phenomenal increase. Within that, there is of course a disproportionate increase in the number of people claiming for mental health. This has been compounded by years of poor health and disability, rising poverty and deepening inequalities, all of which has been measured and recorded.

Those factors have been years in the making. I say to the noble Viscount that all parties have to own that failure and legacy. That includes the failure to plan for an ageing population, which we knew decades ago would require us to rethink the relationship between health, housing and care; the failure to anticipate the impact of the rising retirement age on the numbers of chronically sick and disabled in work; and the failure to care about the inevitable impact that a decade or more of austerity and the loss of essential services would have on physical and mental health in younger and older life. That was all left in the “too difficult” box—which has now been opened by this Government, who have a particular responsibility to act.

Most recently, Covid changed patterns not just of physical and mental health but of behaviour, which we still do not fully understand. There are some explanations, but there is no one conclusive explanation. On our watch, we have an inescapable duty—one we have to share—to make not just PIP but a new social contract for a welfare state fit for the future. We need to meet the needs for work as well as for support. If nothing changes for the 1 million young people out of work, employment and education, they will be condemned by design to further unemployment and poverty.

I welcome the Timms review, and I think it is welcome too for people with disabilities. When I had the privilege of chairing the Adult Social Care Select Committee, we heard, over a considerable length of time, from disabled people and carers about how the system is not working for them. Because of the precarious nature of this and the sense of anxiety every time there is a review, they know that the greatest danger is to do nothing and therefore introduce the risk that social security will be even worse, maybe to the point of collapse, in the next 10 years.

I particularly welcome the emphasis on co-production, using the experts by experience, who can really inform Ministers on what does and does not work. I want to send a particular message to Sir Stephen via my noble friend the Minister. As was already mentioned by the noble Baroness, Lady Tyler, it is absolutely necessary that unpaid carers be involved in the review and in leadership roles. Sir Stephen has said in the other place that it will be a consideration. Can we please have some information to reassure carers that their voices will be heard in the review? As we showed in our report two years ago, the tragedy of the unpaid carer is that they feel and are invisible. If they are left out of this review, it will be another egregious indication that they really do not matter. Whatever changes for them, they will have to go on caring, and whatever happens to PIP will have an immediate and direct impact on them. I trust my noble friend the Minister to take that message to the other place.

19:04

[The Lord Bishop of Newcastle]

My Lords, I begin by offering my congratulations to the noble Baroness, Lady Shawcross-Wolfson; I look forward to her maiden speech, and acknowledge the valedictory speech of the noble Baroness, Lady Bryan. I also thank Ministers for listening to concerns about the Bill when it was initially brought forward.

A functional social security system tackles poverty and supports people to live full lives. With that, the system needs to retain public confidence, expressing the best of our values. It must also strike a balance between supporting people who are able to work and ensuring that people who cannot work are protected and cherished for who they are. We need economic growth—that is not disputed; this is, after all, a money Bill—but I am concerned for those who are left behind or who do not fit the model of financial productivity at the rate that seems to be desired.

There is a granularity to this debate about the complexity of people’s lives, which do not always fit into neat economic models. I therefore note the point made by the noble Baroness, Lady Bennett, in her amendment to the Motion about the rates of poverty among disabled people, who are already disproportionately likely to be living in poverty. This can have an impact on children, making their start in life all the more challenging and deepening systemic injustices.

This landscape of poverty and economic inactivity is acute in the area covered by my diocese in the north-east. There are opportunities to make a difference in local communities—through devolved authority mayors, councillors, community leaders and citizens—but turning the tide on poverty still requires decisive leadership and vision from central government. One of dozens of emails I have received in recent days came from a father in the north-east, who told me about his son who has complex disabilities. He would like to work one day but is struggling to navigate what feels like a punitive approach in the changes to universal credit. His capacity to enter the workforce faces barriers even before he can contemplate exploring opportunities. Our values should hold us to account for how we raise up the most weak and vulnerable.

What do we need? I suggest some joined-up thinking. I understand the Government’s desire to reform the system. It is becoming more expensive to administer, but even if it were not, proportionate actions should be taken to help people make the most of their gifts and skills, whether in the labour market or through volunteering in their community. As other noble Lords have pointed out, the fact that social security spending is rising, and more people receive health benefits, points to shortcomings elsewhere.

On PIP, we should not shy away from the difficult questions that the Timms review needs to ask and answer about the assessment process, the treatment of physical and mental health, and a reasonable eligibility threshold. None of that can happen without tackling some of the causes of ill health: the under- investment in social security and social housing in recent decades; the shortage of mental health provision; the effects of insecure, demoralising work; and the many other areas that noble Lords have already spoken to. I am glad that the Government are addressing some of these challenges, but I hope they will not be considered in isolation, that the Government will monitor the impact of this Bill closely and that the lives of all our citizens can be improved so we may all flourish together, each according to their capacity and need.

19:08

[Lord Rook (Lab)]

My Lords, I am grateful to my noble friend the Minister for her introduction and to noble Lords for what has already been a broad discussion. I look forward to hearing the maiden speech of the noble Baroness, Lady Shawcross-Wolfson, and to her contribution to your Lordships’ House in the days to come. I also look forward to the valedictory speech of the noble Baroness, Lady Bryan, and wish her all the best for the future.

A long time ago, in a land not so far away, I worked for the Salvation Army as a youth worker. In those distant times, there was a new and unhappy category of young person emerging in our communities. While not entirely the stuff of fantasy or fiction, the prospect of sustainable employment for those young people, who we called NEETs, was not that great. Where working life was concerned, those young adults who were not in education, employment or training needed their Government and communities to help them on their way.

As was the case in 2009, we now have almost 1 million 16 to 24 year-olds who are not in education, employment or training. I welcome the efforts in the Bill to reduce those numbers by increasing the incentive and support provided. This will help to reduce long-term benefit dependency, motivate young people to find their place in the workplace and enable those who currently feel left out to seek a way back in.

In 2009, my honourable friend, the right honourable Sir Stephen Timms, now Minister of State for DWP in the other place, was the architect of the future jobs fund. As a youth worker, I saw first-hand how this programme provided the aspiration and activation that so many young adults needed to step up on to the first rung of the career ladder. The Bill provides young people with similar prospects for support, training and opportunity.

As with other legislation, I am keen that we prioritise young people. After all, this generation has been disproportionately affected by the Covid pandemic and other societal challenges. While the current economic outlook clearly restricts the resources available to the Government, the department’s investment of £2.2 billion over the next four years to increase work, health and skills support for all those struggling to find suitable employment is more than welcome.

Once a youth worker, always a youth worker. While my youth work skills are certainly less in demand here in your Lordships’ House, my heart still goes out to those young people struggling to make their way in our country today.

Of all the challenges we face, the current mental health epidemic among young people is among the most significant and urgently demands the attention of government as a whole. For a significant number of those not in education, employment or training, anxiety, depression and other complex conditions can provide a seemingly insurmountable barrier to employment.

With this in mind, I am particularly heartened by the right to try guarantee. This will make it easier for those who are out of work to make a go of things in the workplace. Where support for young adults is concerned, I hope that today’s legislation will be a good start and not the whole story. There is much that needs to be done, for their sake and ours. I am grateful for the tireless work of my noble friend the Minister, Lady Sherlock, and stand to support the Bill today. Given his previous success in this area, I am thankful that Sir Stephen Timms has been tasked with bringing his unique expertise to the upcoming Timms review. I hope that there will be more creative and impactful policy to come and remain keen to see other institutions take the Government’s lead and invest in our young adults.

At the Salvation Army, I saw how a large employer could grasp a government policy such as the future jobs fund to give disadvantaged young people a much-needed hand up and thus reduce the requirements for future handouts. As the Government seek to quicken the path of young adults into future jobs through the Bill, I hope that other institutions will redouble their efforts to give youth a chance and provide future generations with a brighter future.

19:12

[Baroness Browning (Con)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Rook, and I am also looking forward to the maiden speech of my noble friend Lady Shawcross-Wolfson and to hearing the valedictory speech of the noble Baroness, Lady Bryan, later in the debate. I declare my interest as a vice-president of the National Autistic Society and note that I am a vice-chair of the APPG for both autism and for Parkinson’s. I am not going to talk about PIP. We will almost certainly return to that after the Timms report.

The Bill proposes that people with disabilities applying for universal credit in 2026-27 will receive a reduced amount of benefit, from £97 a week to £47 a week. It is a little early to know what the Equality Act will make of that—two people with the same needs and the same disability. When the Minister sums up, it would be very helpful to hear what the appeal procedure is going to be, because I suggest it will be put to a lot of use.

According to the Bill, young disabled people with limited capacity for work-related activity will not be able to claim until they are 22. At the moment, under the age of 22, younger teenagers and those who are above 18 can claim. Here, we are talking about children most likely to have grown up with a lifelong disability, and now they must wait until they are 22. If there is anything one can do to help children with lifelong disabilities, it is to give them a sense of purpose. The idea that there is going to be a stopgap in that procedure concerns me greatly.

Under the Bill, disabled people will be required to provide an NHS diagnosis to comply with the severe conditions criteria. The criteria are narrow and could reduce, as we have heard, the annual amount by 3,000 a year by 2028. Could the Minister explain whether, if a person has a private diagnosis from a registered doctor or psychologist, that will be accepted?

The Government call these changes “adjustments” and “balancing”. I understand the Government’s problem and I know it is growing exponentially. I agree with the comments we have heard from the noble Baroness, Lady Bennett of Manor Castle, about the impact on the sickness of the nation, for various reasons, that has affected general health, in terms of environmental issues. I also agree with the comments from the noble Baroness, Lady Andrews, who raised the issue of the outcome of experiencing Covid as a nation. I still do not think we fully understand the impact that Covid has had, not only on those families who lost people but on those people who worked on the front line. I believe that has had an impact far greater than we fully understand.

In today’s Times, William Hague writes—and I am going to mention another Labour Secretary of State for the second time in this debate—that the former Labour Secretary State Alan Milburn says that the Government should reform to a 10-year horizon, not a single Parliament. I agree with that, because I believe that the single-Parliament approach—or the cliff edge, as it is—sorts people into those who receive benefits and those who do not. I would go further. The employment opportunities for disabled people and the benefits they qualify for should not be based on a one-size-fits-all.

We have heard from many charities. I too have heard from most of the charities mentioned, which all have grave concerns for their members about the impact. They need to be reassured, as of course do the people with disabilities.

People with disabilities who do not receive an out of work benefit or a workplace benefit will end up in the second division of priority and will be affected. There is no doubt about it, they will be affected. The results will become obvious in time. The Government hope that a new approach to employment, training and opportunities for disabled people will bridge that damage. I know that this Minister in particular will do her best to see that that happens, but it would have been far better if there was a 10-year transition, with the job changes preceding the change in benefits.

19:18

[Lord Hendy (Lab)]

My Lords, it is an honour to follow the noble Baroness, Lady Browning. The retirement of the noble Baroness, Lady Bryan of Partick, is a loss to the House and a loss to me personally. On behalf of her adopted home in Scotland, she has made a significant contribution to devolution and constitutional affairs more generally, in spite of the fact that she is really a cockney sparrow. She has many friends here and I shall particularly miss her friendship and solidarity. I join with other Peers to welcome the noble Baroness, Lady Shawcross-Wolfson, and I look forward to her maiden speech, which will follow in a few minutes.

The Bill was introduced, of course, to cut government spending on welfare; that was the justification originally. That was and is not necessary. In the sixth-richest country in the world, there are many more ways of balancing the Government’s books than by cutting payments to the disabled. My noble friend the Minister says that these changes will encourage those who will lose benefit into work, and that work is the way out of poverty. I understand the sentiment, of course, but two factors must be borne in mind. First, there are not 750,000 vacant jobs waiting for disabled or partially disabled people to fill. Secondly, the jobs that may be available will not necessarily lift them out of poverty. The fact is that 31% of those on universal credit are in work, so low are the wages at the bottom end of the labour market. The proposed changes, as has been mentioned, cut the health element of universal credit for those claiming after April 2026 from £97 a week to £50 a week. That cut does not reflect diminished need but is irrespective of need. It is solely to save the Government money. That, I find unacceptable.

The proposed changes also appear to conflict with the United Kingdom’s obligations under the International Covenant on Economic, Social and Cultural Rights and the United Nations Convention on the Rights of Persons with Disabilities. The International Covenant on Economic, Social and Cultural Rights is supervised by a committee with that name, and it has said this:

“In its general comment No. 5 … on persons with disabilities, the Committee emphasized the importance of providing adequate income support to persons with disabilities who, owing to disability or disability-related factors, have temporarily lost, or received a reduction in, their income, have been denied employment opportunities or have a permanent disability … Benefits, whether in cash or in kind, must be adequate in amount and duration in order that everyone may realize his or her rights to family protection and assistance, an adequate standard of living and adequate access to health care, as contained in articles 10, 11 and 12 of the Covenant”.


Under the United Nations declaration, Article 28 provides:

“States Parties recognize the right of persons with disabilities to an adequate standard of living for themselves and their families, including adequate food, clothing and housing, and to the continuous improvement of living conditions, and shall take appropriate steps to safeguard and promote the realization of this right without discrimination on the basis of disability”.


I will not read further for reasons of time. It seems to me that there is a significant risk here that the United Kingdom is or will become in breach of its international obligations.

In addition, eight out of nine new claimants who would currently qualify for full limited capability for work and work-related activity payments will not receive them because of the new fourfold, severe conditions criteria. I will leave others to develop the injustices of those. The Joseph Rowntree Foundation and the New Economics Foundation estimate that the effect of the Bill will be to put 50,000 more people into poverty, and those are people who are disabled and their families.

The removal of benefits from those who would otherwise be entitled to it is something that I cannot support. I know that my noble friend the Minister is not responsible for the proposal, but I hope that the Timms review will cause the Government to think again.

19:24

[Baroness Shawcross-Wolfson (Con) (Maiden Speech)]

My Lords, it is a huge honour to make my maiden speech here in your Lordships’ House, and I am grateful for all the warm wishes that I have received. I want to thank those who have helped me since my introduction, first and foremost Mr Ingram and the doorkeepers, who have been unfailingly kind, along with Black Rod and the rest of the staff of the House. I must also thank my supporters, the noble Lord, Lord Butler, and my noble friend Lady Jenkin. In different ways, they have both inspired me across the years.

Like all of us, I am the product of my family, and, like many of us, my family's story is one of immigration and integration. My father’s father, Hartley Shawcross, came from Lancashire stock. He was a barrister, an MP, Clement Attlee’s Attorney-General and Britain’s chief prosecutor at the Nuremberg trials. In 1959, he was among the first life Peers to be introduced into your Lordships’ House and sat as a Cross-Bencher. My mother’s mother, Leah Katzeff, was born in Lithuania, but her parents, fearing persecution and poverty, emigrated to South Africa when she was an infant. The family who stayed behind were all murdered in Lithuania as the Nazis advanced in the summer of 1941.

My grandparents led vastly different lives. My childhood memories are of clotted cream in Cornwall and chopped liver in Camden. But they shared a love of this country, a commitment to liberty, and a belief in the rule of law. My English grandfather helped to try those ultimately responsible for the murder of my Lithuanian grandmother’s family. My Lithuanian grandmother spent the second half of her life here in England campaigning for human rights and ending her career as director of Justice, a charity my grandfather co-founded decades earlier. Their stories, and the stories of my parents, shaped my sense of purpose.

After starting a career in management consultancy, a desire to be more useful and, I confess, youthful optimism, led me into politics. My grandfather and father both started on the left of the political spectrum and moved right over their careers. I thought I would save myself the trouble and start squarely in the centre-right. After nearly 20 years in Westminster, I have worked with wonderful politicians and civil servants: too many to thank individually. I particularly thank George Osborne, who took a chance in 2007 that a spreadsheet-literate consultant might be useful on his team. George was a wonderful boss—such a good boss, in fact, that he introduced me to my husband, my noble kinsman Lord Wolfson of Aspley Guise. The career I began with George ultimately led me to No. 10 Downing Street, where I ran the Policy Unit for Rishi Sunak. It was the honour of a lifetime. Rishi believes in public service to his core, and I hope to follow the example he sets in public life: unstinting hard work, steadfast integrity and personal kindness.

If the first duty of government is defence of the realm and the second the rule of law, the third, I would argue, is to help the vulnerable. I was fortunate to spend time at the Department for Work and Pensions, most recently as a non-executive director, when the noble Baroness, Lady Coffey, was Secretary of State. As our population ages and demand grows, this country has to grapple with how to run an effective, fair and sustainable healthcare and welfare system. I am grateful for the opportunity to speak in this debate on the universal credit Bill, and I offer two reflections today.

First, we must always live within our means, so every spending decision is a trade-off. Here, I must acknowledge the influence of the noble Lord, Lord Macpherson, and six years working at HM Treasury. Borrowing more is not a solution. I agree totally with the Chancellor when she said that there is nothing progressive about a Government who simply spend more and more each year on debt interest. Instead, we must choose. Reasonable people can and do disagree on what those choices should be, as we can see here today. This debate makes for better decisions, but trade- offs are unavoidable, and we cannot pretend otherwise.

Secondly, policy is always about people. The numbers must add up, but every pound taxed, every pound spent, every incentive created, every disincentive introduced, makes a difference to people’s lives. The Government’s job—and I really know from first-hand how difficult this is—is to see it all: the big-picture cost, the systemic incentives and the individuals at the heart of it.

Twenty years in politics—or perhaps it is just middle age—have tempered my youthful optimism but not my belief in progress. I know that there will be difficult decisions ahead, but I am greatly encouraged by the wisdom, determination and civility that I have witnessed in this Chamber. I will do my best to follow the example that you have all set, and I look forward to making whatever contribution I can to your Lordships’ House.

19:28

[Lord Elliott of Mickle Fell (Con)]

My Lords, it is a huge honour and privilege to be the first to congratulate my noble friend Lady Shawcross-Wolfson on her superb and very moving maiden speech. I am particularly pleased that my noble friend chose a debate on welfare policy to make her debut. Having served in the Department for Work and Pensions as both the chief of staff and a non-executive director, she brings great expertise to this debate. As she reminded us, it is our duty, in our position of privilege, to look out for those less fortunate than ourselves, an obligation expressed beautifully in the speech that we just heard.

My noble friend also brings with her six years’ experience of working in His Majesty’s Treasury. This too is crucial—to policy generally and to welfare policy specifically—because without a growing economy we cannot pay for welfare spending and without a conducive business environment, we cannot create the good jobs that are needed to help people on their journey from welfare to work.

I should also mention my noble friend’s two years as head of the No. 10 Policy Unit. In this capacity, she joins many distinguished Members of your Lordships’ House, including—I am hoping that Wikipedia has not let me down here—the noble Lords, Lord Donoughue and Lord Adonis, the noble Baroness, Lady Hogg, my noble friends Lord Griffiths, Lord Blackwell, Lord O’Shaughnessy and Lord Johnson of Marylebone and, last but certainly not least, the noble Baroness, Lady Cavendish of Little Venice. If the No. 10 Policy Unit alumni do not already have a dining club, I hope that they consider setting one up. We are all lucky to have the pre-eminent brains trust of the country in our midst, including their newest member, my noble friend Lady Shawcross-Wolfson. I offer her many congratulations on a superb maiden speech and our collective thanks in advance for her contributions to this House in the years to come.

Turning to today’s debate, I very much welcome the Government’s aim with this Bill—to get people into work. I was heartened when the Prime Minister said in December, at the launch of the Get Britain Working White Paper:

“Getting Britain back to work is at the heart of my mission to grow the economy”.


This objective is to be applauded. The Government’s Pathways to Work Green Paper in March outlined their plan for getting people into work. This Bill is a key element of that plan in its desire to shift from the current system, which incentivises applicants to maximise health-related benefits.

However, having followed closely the debate on the Bill in the other place, I was disappointed that very few commented on the positive and important role that the business community has to play in getting people from welfare into work. The debate today rightly has delved into a lot of detail about the workings of the benefit system, but the other element of getting people from welfare to work must be the availability of good jobs with appropriate training. The role of the business community as the primary creator and provider of jobs in our economy is therefore paramount. I realise that this point goes slightly beyond the narrow focus of this Bill, but for its overall objective to be achieved it requires the carrot of decent jobs for people to transition to, as the Government’s overall plan recognises.

I will use my remaining time to plant the seed of an idea for a cost-free measure to ensure that there is a carrot of good jobs for people to go to and a carrot for employers to provide these jobs. The proposal is as follows. Noble Lords will be aware there is currently a scheme to incentivise employers to hire veterans, which was introduced by Rishi Sunak in 2020 when he was Chancellor of the Exchequer and extended earlier this year by the Government to run until at least 2026. The scheme is simple. Employers who hire ex-Armed Forces personnel do not have to pay employers’ national insurance contributions during their first year of employment. This is facilitated through a zero rate of employers’ NI on salaries below £50,270 a year. A separate national insurance category is used when submitting payroll reports to HMRC. Similarly, employers hiring those under 21 do not have to pay class 1 national insurance contributions up to the lower earnings limit for these workers. In its submission ahead of the Autumn Budget, I hope that the Department for Work and Pensions might propose extending this scheme or replicating it for those who are moving from welfare into work.

I declare an interest: the proposal was recently suggested by the Jobs Foundation charity, of which I am president, as declared in the register. It was also advocated recently by the Good Growth Foundation, which was founded by and is directed by Praful Nargund, who stood as the Labour candidate for Islington North in the 2024 general election. The Good Growth Foundation is chaired by Tim Allan—who I understand from the Sunday newspapers might soon be joining the Civil Service as a Permanent Secretary—and has on its advisory council the noble Lord, Lord Liddle, whom I see in his place. I hope that he supports the proposal as well. I say this to emphasise and doubly underline that this is not a party-political suggestion but a common-sense suggestion. Even better, it will not cost the Treasury anything. The Good Growth Foundation estimates that the policy would save the Exchequer up to £1.1 billion every year. I am not expecting a commitment from the Minister tonight, but perhaps she might give us her initial thoughts on the proposal at the end of the debate and commit to asking her officials to look into it further.

Returning to where I began, if there is a dining club of former heads of the No. 10 Policy Unit, I hope that they discuss this at their next gathering. It seems to be an eminently sensible suggestion, and anything that encourages employers to help people on welfare into work and saves taxpayers money is surely worth serious consideration by the Treasury to help deliver on the very worthy aims of this Bill.

19:35

[Baroness Lister of Burtersett (Lab)]

My Lords, I pay tribute to the many disabled people and disability and anti-poverty organisations, as well as colleagues in the Commons who listened to them, for winning concessions and shrinking this Bill to exclude PIP. Nevertheless, there remain serious concerns. Although, thankfully, for the most part existing claimants are protected, the shrunken Bill will still cause real damage. Yet the rushed process does not allow for proper scrutiny—a criticism voiced by the many disabled people who have emailed us. We should not underestimate the degree of anxiety, stress and mistrust that this episode has caused them.

The joint civil society briefing, for which I am grateful, warns that by 2030 the cuts to the health element of universal credit will mean a loss of £3,000 a year for 750,000 disabled people, with the impact increasing in future years. They will also have a damaging knock-on effect on carers, some of whom are themselves disabled. A major point of concern is the drafting of the severe conditions criteria, which will protect a small number of future health element claimants with a terminal illness or lifelong condition, and in particular the “constantly” requirement, which applies a more stringent standard than now, to the detriment of people with severe conditions that fluctuate day to day, including MS and Parkinson’s. The Minister in the Commons tried to address this at Third Reading, but the civil society briefing warns that

“there is a gap between the stated intention to exactly reflect the existing severe conditions, and the test which is written into … the legislation”.

Given the lack of time to look at this properly now, will my noble friend consider withdrawing paragraph 6 of Schedule 1, which simply amends existing regulations, so that this can be sorted out through secondary legislation? What the Minister said so helpfully in the Commons needs to be written clearly into legislation. Can my noble friend explain why it is not?

As noted, the Joseph Rowntree Foundation and the New Economics Foundation estimate that the net effect of the Bill’s measures will be an increase of around 50,000 in the numbers of those in poverty by 2029-30. Yet disabled people are already at disproportionate risk of poverty, as demonstrated by a recent report from the APPG on Poverty and Inequality, which I co-chair. Disabled women are particularly at risk—one of the human rights concerns raised by the UN—but the revised impact assessment offers only a superficial high-level equalities analysis rather than a proper equalities impact assessment.

The one mitigating provision in the Bill is the very welcome real increase in the UC standard allowance, which contributes to the aimed-for rebalancing of it and the health element. However, the rebalancing is not exactly balanced as, between the cuts to the health element and the improvements in the basic UC rate, even by the end of the decade we are talking about a real increase of only around £5 a week. Of course, even £5 matters to someone on a very low income, but it is hardly enough to provide the dignity and security that is promised in the impact assessment—which acknowledges that this only starts to improve basic adequacy. As the Resolution Foundation warns, it will still leave benefit income being far from adequate. Moreover, the impact assessment acknowledges that a “fairly small number” will not gain from the increase, because of the benefit cap. Can my noble friend indicate how many this “fairly small number” will be, considering that anyone who loses entitlement to the health element could then be subject to the cap?

I welcome the commitment to coproduction of the Timms review, and the assurances he has given. I hope these will allay the totally understandable fears of disabled people and carers, given the lack even of genuine consultation hitherto. But while, like him, I hope the review group will be able to achieve a consensus, if it does not, then what? Can my noble friend say whether, in such a scenario, those who disagreed with the outcome would be able to publish their views as part of the official report?

When recently I asked my noble friend whether the DWP would consider extending the principle of coproduction to the UC review, she tried to reassure me with reference to forthcoming focus groups with Changing Realities. I am a great supporter of Changing Realities, which brings the expertise of lived experience into the policy domain, but a few focus groups do not amount to coproduction. In an unanswered letter to Minister Timms, the APPG on Poverty and Inequality made the case for establishing a formal mechanism for coproduction and meaningful consultation with those who have experience of claiming UC, so as to avoid the shortcomings of the current scheme.

Finally, I hope the omnishambles of the past few weeks will stand as a lesson for how not to carry out social security reform. Yes, there is general agreement that we need reform. Indeed, I have been arguing for it for years, all the more urgently after a decade or so of cuts amounting to £50 billion a year—the very opposite of the scare stories about ballooning expenditure. Charities, think tanks and academics all make the case for investment in social security as a force for good rather than treating it as a dead weight. It is time we put the security back into social security.

19:40

[Baroness Brinton (LD)]

My Lords, I declare my interest as a vice-president of the Local Government Association. It is a pleasure to follow the noble Baroness, Lady Lister of Burtersett. I thank the many disabled people and organisations who have written to us all. I congratulate the noble Baroness, Lady Shawcross-Wolfson, on her maiden speech and look forward to hearing her future contributions. Along with other noble Lords, I look forward to hearing the valedictory speech from the noble Baroness, Lady Bryan, and I wish her well. We will miss her.

Other speakers have outlined the changes in the Bill following the outrage from disabled people, and the major Labour rebellion in the Commons, but there are still concerns about this reduced Bill, as well as the Timms review looking at personal independence payments. The Secretary of State’s tone in her speeches was very worrying right from the start. The premise that all that disabled people and those with serious health problems need is support to get a job was, to disabled people, quite extraordinary. Worse, there was an implication that many of them were workshy. That is not the problem. I entirely agreed with the noble Lord, Lord Elliott, when he set out that more needs to be done to encourage business to offer proper jobs and support disabled people in them.

In referring to changes to PIP, the Secretary of State repeatedly implied that PIP was an in-work benefit—it is not. It is there to help disabled people manage the extra costs of life, as the noble Baroness, Lady Grey-Thompson, outlined. At the Work and Pensions Select Committee last week, my honourable friend, Steve Darling MP, who is visually impaired, had repeatedly to challenge the Secretary of State’s assertion that cutting PIP would help people get into work. Kemi Badenoch MP, the leader of the Opposition, said last week that it was possible to claim PIP by self-certification, as well as suggesting that every disabled person in the country claims disability benefits. She also asserted that it was possible for someone with a food intolerance to get a Motability vehicle. Not one of those statements is true. It is alarming that senior people in the two main parties in the Commons appear to be demonising disabled people, but it is really good that the Minister and the noble Baroness, Lady Stedman-Scott, do not use this approach and this tone.

The definition of a disabled person is someone with a condition or illness that lasts 12 months or more, which limits their ability to carry out day-to-day activities. The one in four statistic includes the elderly: 40% of the elderly fall into the disabled bracket. Perhaps demography is also increasing the number of disabled people.

I turn to what remains of the Bill. On the changes to universal credit, principally the limited capability for work-related activity—the health element—the proposals will create a two-tier benefit system, as others have said, and may breach the Equality Act. It is extraordinary that the Government believe it is acceptable to halve and then freeze the UC element. People with disabilities and health conditions will find their costs far harder to manage, despite having to live with severe conditions. This may mean that they have to resort to the NHS or social care, with increased costs to those public budgets. What assessments have the Government made of the additional costs that are likely to be transferred to the DHSC, other departments and local authorities? The impact assessment on the UC element says on page 5:

“Nearly three million people are not working or looking for work due to ill health, a significant increase of nearly 800,000 since early 2019”.


The noble Baronesses, Lady Andrews and Lady Browning, both mentioned Covid. As the health spokesperson for the Lib Dems during that time, I am interested in the statistics. The ONS data published last year showed that the number of people in England and Scotland with long Covid had increased by 2 million and, of that number, around 381,000 had serious life-limiting Covid. Worse, many doctors are now reporting significant increases in certain serious chronic diseases, such as Parkinson’s, multiple sclerosis and rheumatoid arthritis—caused, it is thought, by triggering the immune system following Covid. Have the long-term direct and indirect consequences of the pandemic been taken into account in these increased numbers? Has advice been sought from the Chief Medical Officer and the NHS?

Finally, will Ministers please truly consult and work with disabled people? Decades ago, disability campaigners created the phrase “nothing about us without us”, but the publication and announcements for this Bill have destroyed whatever tiny amount of hope the disabled community had that this new Government understood disabled people and their lives. There is much rebuilding of trust to do.

19:46

[Lord Sikka (Lab)]

My Lords, I congratulate the noble Baroness, Lady Shawcross-Wolfson, on her excellent speech and welcome her to the House. I also look forward to my noble friend Lady Bryan of Partick’s valedictory speech. I thank her for her compassion and mentoring. When I first arrived in this House, she said, “You must faithfully follow all the signs and instructions”. The first sign I saw said “Keep left”, so I have been following that ever since.

The Bill before us is cruel. It started life as the Universal Credit and Personal Independence Payment Bill and morphed into the Universal Credit Bill. Without providing any evidence, Ministers said publicly that without cutting benefits to the disabled, the welfare system would actually collapse. Strange: no such argument is ever made when vast sums are handed out in corporate welfare. Billions of pounds have been handed out in subsidies and uncosted tax reliefs to banks, auto, steel, shipbuilding, oil, gas, biomass, water, rail, the internet and many other industries. No equity stake is acquired in return and no cost-benefit analysis is ever produced.

The Government said on 23 April 2025 that spending on welfare would be 10.6% of GDP this year, which is considerably below the OECD average. The National Institute of Economic and Social Research said earlier this year that the UK has some of the least generous welfare across OECD countries, yet here we are inflicting more harm.

The Bill still targets the disabled. There has been no assessment of its impact on the NHS, public services, local economies, families, people, and human dignity. The assumed financial savings are unlikely to materialise. I welcome the proposed £1 billion investment in employment support and a right to try but, after changes in the Commons, the cuts are still there to the amount of around £2 billion. This is a large amount and will devastate the lives of around 1.6 million disabled people by slashing the health element from £97 a week to £50 a week for those applying for universal credit after April 2026. That is a cut of £2,444 a year and will plunge millions of people into poverty. It violates any notion of equality by creating a two-tier society. Pre-April 2026 claimants will not really be safe, as their circumstances can change and they may well be classified as new claimants and lose what they are getting now.

No evidence has been provided to show that the government policy will deliver the assumed objectives, jobs and savings. The OBR will not publish its analysis until later this year. The Timms review will not begin until autumn, and we still do not have the full wording of the new eligibility criteria, and Parliament will not really be able to amend it, though it may be able to discuss it. Consultations were needed before proceeding with the Bill, but that has not been the case.

There is no shortage of money. For example, around £15 billion a year can be raised by taxing capital gains and dividends at the same rate as wages. Another £14.5 billion can be raised by standardising tax relief on all pension contributions at the basic rate of income tax, but the Government are choosing not to do that. We are all one serious illness or accident away from becoming disabled and needing benefits. None of us could live on the new level of reduced support for future claimants. The Bill removes hope and support for those who desperately need it. I regret that I cannot support the Government on this Bill.

19:51

[Baroness Bryan of Partick (Lab) (Valedictory Speech)]

My Lords, it is always daunting to follow my noble friend Lord Sikka. His depth of knowledge and of figures always amazes me. I congratulate the noble Baroness, Lady Shawcross-Wolfson, not only on her great pedigree in coming here but on her maiden speech. We are doing our bit for the numbers here, on the basis of one in, one out.

I thank your Lordships so much for all the very kind comments. I blush when I hear them, because I feel a fraud, giving a valedictory speech after only seven years in the House. That is just the blink of an eye compared with many Peers. Despite my short stay, I would like to put on record my thanks to those who have given me support while I have been here, many of whom are in the Chamber today. The doorkeepers have always been tremendous and, from my first day, given me their kind support. Some old friends among them have retired, while other stalwarts remain, and I have seen the professionalism of the newer doorkeepers. I thank them all.

I was honoured to be introduced by my noble friends Lady Chakrabarti and Lady Hayter of Kentish Town—two formidable women from whom I have learned a lot. It has been a particular honour to support my noble friend Lady Chakrabarti in her many attempts to protect human rights during the last Parliament. The most important person who helped me settle in and find my way around, both procedurally and geographically, was my noble friend Lady Gale. She was my unofficial mentor and remains, I hope, a good friend. I also remember that my first Whip was my noble friend the Minister, who was as gentle and supportive as any Whip can be.

However, I have never been reconciled to the unelected nature of the House of Lords. While I wish good speed to the Bill to abolish hereditary Peers, it will not change the fundamental problem of the imbalance in representation in this House. During my time on the Opposition Benches, I saw how difficult it was to pass amendments just to ask the Government to think again. Currently, the main opposition party can defeat the Government simply because, at times in the past, the Conservative Party has used its patronage to create more life Peers than Labour has. I believe that a second Chamber must be a check on the powers of the Executive, particularly when Members of the other place are unable to perform that role. But the basis for a second Chamber should be rooted in democratic accountability. The House has many Members who represent the great and the good, but it is not representative of or answerable to the people who are affected by the legislation it considers, including the Bill we are discussing. So I leave still committed to an elected senate of the nations and regions, and I will continue to write and campaign on that cause.

I turn now to the Universal Credit Bill. I thank campaigning groups for their briefing papers and the many individuals who shared their lived experience, which undermines the false idea that anyone can self-identify as disabled. I put on record my admiration for the many disabled campaigners who were successful in persuading the Government to accept that their first Bill was deeply flawed. I am proud to stand with the MPs who campaigned against both Bills, in particular the four Scottish Labour MPs who stood by their constituents and principles and voted against this Bill.

Despite the decision to consider the future of PIP in the Timms review, the Bill will have a devastating impact on those who need to claim the health element of universal credit. Last week, we saw levels of unemployment rise to a four-year high. Finding skilled, well-paid jobs is challenging for everyone; the slogan “those who can work, should work” is meaningless if employers are even less interested in making the adjustments needed to bring disabled workers into the workplace. Surely that is where the emphasis needs to be. Employers should have an obligation to make space in their workplaces for disabled people.

I hope the Minister recognises that the Bill was perhaps drafted in undue haste. In a debate in 2020, she said the very wise words:

“Occasionally, all of us in politics need to reflect that when we legislate in haste, we may repent at leisure”.—[Official Report, 3/9/20; col. GC 69.]


I hope that the Bill can wait for the publication of the impact assessments and supporting information, including the analysis of the Office for Budget Responsibility on the expected number of people moving into work as a result of these changes. It is likely that that analysis will show that many of the people affected will not be able to move into work; instead, they will be moved into greater poverty.

I look forward to hearing from my noble friend Lady Ritchie, who has been such a valuable Member of this House.

19:58

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, it is an absolute pleasure to follow my roommate and noble friend Lady Bryan of Partick as she makes her valedictory speech today and says farewell to the Chamber. As my roommate in Room 14 on the 2nd Floor, West Front, along with our mentor and boss, my noble friend Lady Gale, and my noble friend Lady Chakrabarti, she formed a very good friendship with all of us. She is a good colleague and a hard-working campaigner for social justice, fairness and equality for all, and in particular for all the residents of Scotland. I hope that, outside this Chamber, she continues that work in whatever guise she decides.

I welcome the maiden speech of the noble Baroness, Lady Shawcross-Wolfson. She is very welcome in your Lordships’ House.

Moving on to the Bill, I welcome the Government’s decision to make concessions in relation to the original Bill with regard to PIPs and disabilities, as well as, on a separate basis, the winter fuel payment. As a former Minister with responsibility for welfare in Northern Ireland—under the principle of parity, the Bill will apply in Northern Ireland—I recognise that welfare is a very challenging issue and requires to be reformed, and that the financial bandwidth has been lessened due to the actions of the previous Government over 14 years and the existential threats posed by Brexit.

None the less, the concessions show a listening Government. But there is a little more that needs to be addressed, as has been referred to in this debate, in the many letters we have received via email and in the various submissions from disability organisations. I hope the Government will be able to lead, listen to the needs of the disabled and provide a solution with particular reference to the health element of universal credit for new claimants. I hope that those measures, which bring benefit to disabled people, will emerge from the Timms review, which will be co-produced with disabled people through listening to and working with them.

Many people have said to me that there is a fear in the wider community of a possible return to austerity. I would like assurances from my noble friend the Minister that that will not be the case and that the most vulnerable, who have faced disproportionate costs for heating and food over many years, will be protected by benefits uprated in line with inflation.

People still find themselves disproportionately affected by rising inflation and the ongoing cost of living crisis. The latest consumer prices index has spiked to 3.6% for June 2025, with the Bank of England predicting possible further rises due to higher food and energy prices. In such circumstances and in the context of the Bill, will my noble friend the Minister commit the Government to social security benefits uprating in line with inflation for those out of work and those in low-paid work? She provided me with some comfort some weeks ago in answer to my question when she stated

“the Bill says that we are guaranteeing an above-inflation increase to the UC standard allowance in each of the next four years”.—[Official Report, 2/7/25; col. 807.]

I hope that that will be the case, notwithstanding the challenges faced by the Treasury and the Government, and taking on board the increase in price inflation figures released some days ago. That is the issue for Advice NI in Northern Ireland, which represents many people in receipt of disability benefits.

I have a further question for the Minister. What if the move to universal credit takes longer to complete than by March 2026? Will anyone who moves from ESA to universal credit after March 2026 be treated as a new universal credit claimant and so be subject to the health element, which would mean a 50% reduction for new claimants? I am looking for some assurances. Therefore, can my noble friend the Minister indicate what the situation will be? None of us want to see people ploughed into endless poverty, disadvantage and financial loss while enduring their disability.

The Cystic Fibrosis Trust and the disability charity Scope, while welcoming the Government’s concessions, are concerned about the fluctuating nature of health conditions for new claimants. Therefore, can my noble friend the Minister outline what further measures could be provided to assuage the concerns around the health element of those potential new claimants for universal credit? Many disability conditions do not disappear with changes in social security regulations or legislation.

20:04

[Baroness Scott of Needham Market (LD)]

My Lords, I have a long-standing interest in ME—chronic fatigue syndrome—having seen at first hand its awful impacts on people’s lives. It is good to be able to say something this evening, because today we saw the publication of the long-awaited delivery plan on ME. It is very welcome to see that. The Ministerial foreword says that we need

“a better understanding of the condition”.

I think patients with ME would certainly agree.

For context, an estimated 400,000 people in the UK are living with ME, and around a quarter of those are disabled to the extent that they spend most of their lives in bed. The remainder have symptoms on a very wide spectrum. As we heard from the noble Baroness, Lady Brinton, it is estimated that around 381,000 people have serious post-viral symptoms that have lasted for more than two years as a result of long Covid. Long Covid is not the same as ME, but there are some similarities.

The sad truth is that for many people ME is a lifelong condition. Its severity and impact vary enormously, not just between individuals but for the same individual, both over the long term and as part of a pattern of symptoms in the short term. Flare-ups are common, relapses occur, and it is entirely unpredictable.

For claimants, that means tasks that can be completed on some days cannot be completed on others, or simply cannot be sustained. I had a look at the training module for assessors, which says, “This training will take you approximately 30 minutes to complete”. The training is not bad, but I suggest to the Minister that 30 minutes is wholly inadequate to train an assessor in determining the condition of someone who is presenting such a complex set of conditions.

The delivery plan, which I referred to, says that we need

“to ensure that … the right decisions are made the first time”.

Amen to that, but the briefing from Scope tells us that around 49% of universal credit decisions reaching appeal are overturned. I cannot help but wonder whether that is related to the level of training on the part of the assessors. It would be very good if the Minister could say a word or two about that.

From April next year, new claimants will get a reduced limited capability for work rate, even if they have the most severe form of ME. Although it is lifelong and often seriously disabling, because it fluctuates and has an uncertain prognosis, many people will simply fail the “severe, lifelong condition” criteria. Many will not reach the strict “no improvement expected” test and thus will be locked out of the enhanced support.

Current regulations refer to

“the majority of the occasions on which the claimant … attempts to undertake the activity”.

The new regulations refer to “all occasions”. That is highly problematic for anyone with a fluctuating condition. I am talking this evening about ME, but we have heard from many other organisations and from individuals who have fluctuating conditions.

Freezing for four years means that disability support will not rise with inflation while other basic costs such as food and energy keep rising. It is a fact that many ME patients carry on working—life is tough, but they do it—and there are many others who aspire to work. They want to recover enough to one day go back to work, but it is complex and unpredictable. Their general health and well-being are key if they are to get back to work. Being pushed into poverty by measures in the Bill and by other measures will simply further disadvantage people with this condition.

Although not in the Bill, there is consultation on removing the health element of universal credit for under-22s. That is causing widespread concern, particularly among families and carers of young people with ME. The median onset age for ME is 15.

I agree with the comments made by Steve Darling, my colleague in the House of Commons, that the key to achieving the Government’s aspirations for welfare reform is genuine engagement with the people affected. I say to the Minister that, from reading the briefings from the organisations, it is very clear there is a huge gulf between the picture that she has painted today and the understanding of the organisations, and, perhaps even more importantly, the testimony from many hundreds of people who are now desperately worried about what the future holds for them. We need collectively to do much better to offer them not just a financial leg-up but some reassurance that we have their back.

20:10

[Lord Liddle (Lab)]

First, in her absence, I congratulate the noble Baroness, Lady Shawcross-Wolfson, on a very graceful maiden speech. I say to the noble Lord, Lord Elliott, that if he goes ahead with the idea of having meetings of former heads of the No. 10 policy unit, I hope that I, as a mere humble member, might occasionally be invited. Secondly, I would like to say how much I will miss my noble friend Lady Bryan of Partick. We come from opposite ends of the Labour spectrum, but one thing we have in common is a great love of Keir Hardie, who is one of my great heroes. In the context of this debate, I remind noble Lords that his great campaign was for the right to work, not the right to benefits.

The Conservatives left us with a pretty dire situation on social security in 2024. We are going to talk today not about the triple lock, but benefits. We were spending £64.7 billion on incapacity and disability benefits in 2023-24, which was an increase of 40% in real terms since 2013—an increase, not a cut—and it has been forecast that this amount will go up to £107 billion through this Parliament. This is a massive £36 billion increase in five years.

One of the reasons for this is that the number of people receiving the health element of universal credit soared from 2.5 million to 3.7 million under the previous Government, a 1.2 million increase. As my honourable friend in the other place, Alison McGovern, said, it is obvious that the current system is not financially sustainable. The Economic Affairs Select Committee, of which I am a member, did a report on why this has come about. It could discover no adequate health explanation for the rise in the number of people on benefits. What was clear was that the DWP had stopped vetting people properly to receive this benefit. Whereas before the pandemic, seven out of 10 people were given a proper interview, that virtually stopped. The cost of that failure of the system is huge, and I do not think we can go on as we are.

There is another issue that I know is very difficult, but we have created a situation where people out of work on disability benefits are significantly better off than people who work—who flog their guts out on the minimum wage and receive universal credit. We have got the incentives for work all wrong, and this is politically unsustainable. I have spent much of my life campaigning for the Labour Party on council estates, going around the country representing people on three local authorities, all in areas with deprived estates. A situation where people are going out to work full time and seeing people on the opposite side of the street with a considerably higher income is not sustainable.

I support the central proposition of this Bill, which is to equalise universal credit, but it has to be combined with a very strong welfare-to-work programme. There is nothing social democratic or socialist in enabling a young person with mental health difficulties to go on to a lifetime of benefits. We have to move away from that. We have to have welfare-to-work programmes, as we did in the Blair and Brown Governments. That is the key to the future.

Finally, the other reason why we have to tackle the cost of disability benefits is that otherwise, we are not going to be able to tackle child poverty, which, for me, is a much bigger cause: it can lift families out of desperate poverty and enable them to have many more opportunities in life. This is the great cause to which a Labour Government should address themselves, and unless we deal with the problem of working-age disability benefits, we will never be able to afford it.

20:15

[Baroness Smith of Llanfaes (PC)]

My Lords, I will speak in the gap, if I may. I would like to congratulate the noble Baroness, Lady Shawcross-Wolfson, on her maiden speech. I look forward to her future contributions, particularly with her policy background. I also want to thank the noble Baroness, Lady Bryan, for her service to this House.

I support the regret amendment in the name of the noble Baroness, Lady Bennett, and I have key three key points to add to this evening’s Second Reading of the Universal Credit Bill. First, on Wales, the Joseph Rowntree Foundation calculates that there are almost 900,000 disabled people in Wales—around 30% of the population—with 26% of working-age adults self-reporting as being disabled. The DWP’s own Green Paper evidence pack shows that Wales will be disproportionately affected by any changes to welfare. It shows that 14.7% of the working-age population are on disability and incapacity benefits, the highest in the UK, while 20.4% of working-age people and 26.9% of working-age households in Wales receive universal credit. The Bill has also been highlighted by the First Minister of Wales as having a disproportionate effect on Wales. Will the Minister share with us what specific attention the UK Government have given to these disproportionate effects, and what discussions His Majesty’s Government will be having with the Welsh Government on the effect of this Bill?

My second point is that we already have a two-tier benefit system, and this Bill, as so eloquently pressed by other speakers, will worsen that. What I mean by that is that the two tiers already in existence are in relation to age. I will illustrate this briefly. Universal credit rates are 20% less if you are under 25, and the housing cost elements can be 45% less for those under 35 in some areas. There is a presumption here that all young people have parents or family members to support them, which is not the case. Practically speaking, the cost of food and bills is not, shockingly, cheaper for those who are, say, 24 years old compared to someone over 25. I ask the Minister: are those age rates something that will be addressed in the future? The noble Baroness, Lady Browning, also raised real concerns in relation to the gap in the welfare system for those with lifelong disabilities who are under the age of 22.

Finally, as a former unpaid carer, I would just like to add my voice to the calls for further clarity for unpaid carers under this new system.

[Lord Davies of Brixton (Lab)]

If I may, I will speak briefly in the gap, principally just to—

[Baroness Anderson of Stoke-on-Trent (Lab)]

My noble friend has not given notice.

[Lord Davies of Brixton (Lab)]

Okay. I just wanted to say thank you to my noble friend Lady Bryan.

20:19

[Lord Palmer of Childs Hill (LD)]

I thank the noble Lord. With speakers in the gap, you never know quite where you are.

My Lords, first of all, it is a great pleasure to welcome the noble Baroness, Lady Shawcross-Wolfson, and to compliment her on her maiden speech, as well as to compliment the noble Baroness, Lady Bryan, on her valedictory speech. The noble Baronesses enshrine the principle we have often noted in your Lordships’ House of “one in, one out”. This is a good example.

The Minister gave, as usual, a very good summary of the Government’s position, including the reasons for the removal of the PIP provisions from the Bill. A comment was made that she has been gentle and supportive, and I would comment from the Opposition Benches that I always find her gentle and supportive.

The noble Viscount, Lord Younger, made some interesting comments, including that the House will not be fooled. I thought that was very pertinent. He also said that the Government are running away from real reform.

My noble friend Lady Tyler drew great attention to the reduction of support for those with mental health problems, and to the involvement of carers, which has not been emphasised too much during this debate.

The noble Baroness, Lady Bennett, has her regret amendment, to which she spoke eloquently. If she moves to a vote, the Liberal Democrats will be supporting that. It is a welcome relief in a money Bill to have an opportunity to vote for anything—and this is not just anything but something worth voting for.

The noble Lord, Lord Elliott, made some points about decent jobs and giving a carrot to employers. That is an interesting aspect, which has not been discussed in the Bill. He also raised something that I did not know about ex-servicemen’s relief, which is something to be borne in mind.

My noble friend Lady Brinton gave a good clarification on PIP during her comments.

There needs to be reform of the welfare system, but this Bill is not the way to do it. On its way to this Chamber, the Bill has been described by others, including my noble friend Lady Tyler, as shambolic. There is not enough linkage between the NHS and the care system. There are still people stuck on universal credit because they are stuck in an unresponsive NHS.

From April 2026, the health element for new universal credit claimants will be cut, from £97 to £50 a week. As was drawn attention to by the noble Lord, Lord Sikka, that means a loss of £2,444 per year. This will push hundreds of thousands into deep poverty, stripping away legal protections and forcing people to choose between food and essential medication.

The consequences are clear: spiralling hunger, mental health crises and suicide. These changes will destroy lives. Only one in nine claimants who would currently receive the full limited capability for work and work-related activity support will qualify under the proposed severe conditions criteria; that is, just 200,000 people.

The SCC introduces four new harsh eligibility hurdles. First, there is the finding of unfitness for work and work-related activity. Secondly, it specifies an NHS-only diagnosis, excluding private specialists, which is a trip into the old world. People are not using only the NHS, so why exclude private specialist diagnoses? Perhaps the Minister could explain that. Thirdly, there is the hurdle of a lifelong condition. Fourthly, symptoms must meet Schedule 7 descriptors constantly and not episodically.

These requirements structurally exclude and discriminate against people with fluctuating conditions, such as multiple sclerosis, schizophrenia and Parkinson’s. They punish those stuck on NHS diagnostic wait lists, some for more than a decade. My noble friend Lady Scott drew attention to ME as a long-standing symptom, but it is one of many.

The Bill also scraps ESA Regulation 35(2), a vital safety net that protects people from being forced into unsafe work where there is substantial risk of harm or suicide. The safeguard is applied only when clinicians provide serious evidence of the danger, and its removal is reckless. Coroners’ prevention of future death reports have repeatedly warned of tragic outcomes with such protections missing.

No one has really talked about whether the Bill will now save money. I quote Helen Miller, the deputy director of the IFS:

“The government’s original reform was set to save £5.5 billion in the short run … and double that in the long run when fully rolled out. Without reform to Personal Independence Payment, the watered down bill is expected to deliver essentially no savings over the next four years. This is because over this period the forecast savings from reducing the Universal Credit (UC) health element for new claimants … will be roughly offset by the cost of increasing the UC standard allowance”.


This is typical of the Government and just like the winter fuel allowance. We understand why the winter fuel allowance was cut but, with people claiming additional benefits, the monetary benefit of removing it was not there. History is repeating itself.

This is a money Bill and our formal powers are limited, so I put it in simple terms to the Government—four very simple points. First, they should recognise that the exclusion of fluctuating conditions is unfair. Can the Minister answer that? Secondly, the change to require NHS-only diagnosis and treatment is also unfair. Thirdly, we should defend the protections of those at substantial risk. Fourthly, where is the engagement with carers’ organisations, as referred to by other Peers?

From these Benches we call for revision to the severe conditions criteria and the restoration of essential safeguards, which will help future legal challenges and put disabled people’s voices and lived realities on the record. This is a faulty Bill, and it should not even be here.

20:27

[Baroness Stedman-Scott (Con)]

My Lords, I thank the Minister for her introduction to the Bill and for the ability to speak openly to her in the lead-up to today. I completely agree with the Minister that benefits should be easy to access for those who are in genuine need and difficult—even impossible—to access for those who are not in need.

I warmly welcome my noble friend Lady Shawcross-Wolfson to your Lordships’ House and congratulate her on her maiden speech. I have no doubt that my noble friend will make a significant contribution to the work of this House. The strength of that contribution was clearly understood today. My noble friend and I spent many interesting times in the DWP debating the merits of changes to the Child Maintenance Service with our own other noble friend Lady Coffey.

I wish the noble Baroness, Lady Bryan of Partick, well as she leaves your Lordships’ House. I thank her for her service and can confirm 100% that the noble Baroness is no fraud.

I want to focus your Lordships’ minds on the realities facing millions in this country and on the striking absence of ambition in this Bill. I will summarise the issues I believe the Government should address and attempt to solve, and where they ought to have begun before embarking on this legislation. I have always tried to be balanced and measured in my approach to this subject matter, and today will be no exception. I want to discuss the facts, which are important. We should be straightforward about them because, in discussing and debating them, we might get some solutions that benefit the people we exist to serve.

First, I was surprised that there is nothing in the Bill that addresses the deep-rooted challenge of long-term benefit reliance. People have always depended on the state when they see no other path forward. I was delighted that my heart was beating in concert with that of the noble Lord, Lord Liddell, when he talked about it being outrageous that people should get more on benefits than they would if they went to work. There are people who say, “Why should I work when I can get this?” The other day I was with somebody who works goodness knows how many hours a week. He told me that his friend, who is on benefits, was on Brighton beach. I suppose that is legit. When she went for a benefit assessment with her doctor, she used to put thick mascara around her eyes and Vicks underneath to make herself cry. Well, it worked. We should not have those sorts of things.

There is nothing in the Bill for those who have tried and failed; for whom interventions and standardised work programmes have never worked. Some people have been on every government programme that has ever been devised and delivered, but, to our shame, they still remain out of work. In one area of the country, they call these people their “beached population”, because they are completely held out of work by various conditions, or simply a lack of opportunity.

The right reverend Prelate the Bishop of Newcastle made a very good point that we cannot standardise things. One size does not fit all, and having flexibility in the service we offer people is going to be really important. I note the points made by the Minister on PIP assessments. I congratulate her on the commitment to do them face to face. The only reason that face-to-face assessments were stopped was Covid, and I am glad that they are coming back.

We must do better, especially for those living with disabilities and battling severe conditions every day. I recognise the Government’s progress on the Conservative principle of the right to try and welcome recent investments in skills, but without real, personalised, wraparound support, these efforts will continue to fall short for some people who need them. I have had loads of emails, as I am sure other noble Lords have, from people concerned about the impact on disabled people. I completely agree with the noble Baroness, Lady Grey-Thompson, that the media have not helped one little bit in the way that they have frightened people into believing that certain things will happen, when maybe they will not.

Why can we not offer real choices and a sense of purpose to those who have never truly had one—a point well made by my noble friend Lady Browning. Where is the choice for the choiceless? I thought that the noble Baroness, Lady Bennett, had pinched my speech, because we were sharing those words, so we are at one on that. I am very happy to confirm that the family the noble Baroness told us about should get the help that they really do deserve.

Secondly, our labour market is faltering. The most recent figures show that payrolled employees have fallen by 0.6% on the year, vacancies are down by 63,000 in the last quarter and the universal credit claimant count rose again in June to 1.743 million—up on both the month and the year. Yet this Bill offers no road map or plan to reverse the trend.

The West Midlands and London, two of the most populous and diverse economic regions, have experienced some of the weakest labour market recoveries. The constituencies with the highest universal credit claimant rates dominate the top of the list. This is no coincidence. The data reveals a stark truth: high claimant rates correlate directly with underperforming local labour markets. Jobs created are either out of reach or out of sync with the people who need them most. Nothing in the Bill seeks to address this reality. Where is the effort to connect talent to opportunity? Where is the connection for the unconnected?

We also know that adult education and skills training are the key to unlocking potential but, for too many, those doors remain shut. Whether it is basic maths and English or technical qualifications, acquiring skills later in life is profoundly difficult. Even when the financial support is there, awareness is lacking. Claimants are struggling to find tailored practical pathways that fit around the daily grind. Nothing in the Bill seeks to address this reality. Where are the accessible education opportunities for those who need them most? Where are the education opportunities for the forgotten?

In my 32 years of helping people into work, I—like all noble Lords—have seen the battles people face, the demons behind closed doors and the slow grinding effort required to turn lives around. Although the Government can do a lot, they cannot do it alone, and neither should they. Civil society must meet the challenge with urgency, and very often they are the best people to engage with the people we are talking about and trying to help this evening. What we need is not another scheme; we need belief and commitment. We need to support people who walk life’s tightrope every day, to keep them in work—not just for their finances but for their sense of purpose. Nothing in the Bill seeks to address this reality. Where is the direction for those who need it most? Where is the hope for the hopeless?

Nowhere is this more critical than with our young people, especially those who are NEET. This is a group that I and others in this House have worked with very closely, and I am sure we all care deeply about it. Today, over 800,000 young people in the UK fall into this category, and that should be a shock to us all. It should stir us into action—a point well made by the noble Lord, Lord Rook, who mentioned one of my favourite organisations: the Salvation Army. It was William Booth who set up the first labour exchange; the Government nicked the idea, and today we have Jobcentre Plus. Behind that number are real lives—real young people who were told to work hard, go to school and go to university. They did, but they now find that promise broken. How will the Government stop young people becoming NEET in the first place?

Graduate jobs are also vanishing as AI and automation reshape the economy. Up to one-third of traditional graduate roles are expected to disappear. These young people are not lacking in ambition; they are simply not being met with opportunity. The consequences are severe: studies show that time spent NEET leads to worse mental and physical health and a greater likelihood of unemployment or poor-quality work for years to come.

Consider the broader economic picture regarding inactivity. The UK inactivity rate for working-age adults is now 21%. Some 37,000 working days were lost to labour disputes in May alone. We face a softening labour market, falling payroll numbers and growing economic disengagement. At the moment, the Bill does nothing to respond to this. My noble friend Lord Elliott made the point that it is only employers who create jobs. Nobody else does that. You cannot buy jobs; it is only employers who create them. We need to work with employers to make sure that those jobs are created. Even I cannot offer the Minister the offer that my noble friend made, so if I were her I would grab it quickly. Meanwhile, we are told that the Bill delivers value, but the Institute for Fiscal Studies has shown that there are no net savings—yet we still plan to spend £2.2 billion immediately. Where is the fiscal prudence in that?

Hanging over all of this, our welfare bill is forecast to exceed £100 billion by the end of this Parliament. Our national debt, enormous in size, is even more concerning in composition—much of it inflation linked, meaning that prices rise directly and raise the cost of our repayments. This is a dangerous fiscal position. As my noble friend Lady Shawcross-Wolfson said, we cannot borrow, and we cannot borrow our way to opportunity. We need growth and reform and, above everything else, people in work. We will not reduce the bill until we reduce the dependency; that is the fundamental truth at the heart of this debate. We must win the argument that an ever-expanding welfare budget is not an act of kindness—it is a form of cruelty. It traps people, robs them of dignity and hollows out society’s productivity.

The Government, through the NICs Act—I know that it is a sore subject—have taxed work at the expense of people and of what employers are able, or now not able, to do. We need a new vision, one rooted in belief, backed by action and committed to the conviction that everyone deserves the chance to thrive through work. Many may ask, “What does that matter to me?” The answer lies in the long-term health and balance of our economy and of the people impacted. We risk drifting towards a situation where the welfare state outpaces the economy that sustains it—a point made by the noble Lord, Lord Palmer of Childs Hill. A fair and sustainable system depends on a strong workforce and a thriving labour market.

Britain needs people like us who will speak plainly about the scale of the challenge, and many in this Chamber are doing that. Your Lordships’ House knows me well, and I will continue to speak for the voiceless, the choiceless, the hopeless and the workless, and I know that noble Lords will all join me in that. I will continue to challenge the silence in this Bill and continue to fight with noble Lords for a future where work is not only possible but purposeful.

21:41

[Baroness Sherlock (Lab)]

My Lords, I thank all noble Lords for their contributions this evening. It has been a really interesting debate. I particularly thank the noble Baroness, Lady Shawcross-Wolfson. What an astonishing story and what an incredible heritage. I can only think that her forebears must be so very proud of her. It is a real joy to have her here with us today.

I thank my noble friend Lady Bryan. It was a privilege to be her Whip. I cannot say that I was always successful in persuading her of my point of view, but it was an absolute delight to work with her and we will miss her very much. I know that retirement for her will not mean walking away from the cause of social justice; indeed, she may be the first person to leave the House of Lords to spend more time in politics. We thank her for her contribution and we hope that she stays in touch.

Before I turn to the specific points raised, I say from the outset that this Bill is simply one part of the Government’s wider programme to reform our social security system so that it is sustainable and helps people to build a better life. That is what it is there to do, but it is part of a much wider programme. Let us bear that in mind as we go through.

Let us look at the specifics. I will try to talk on as many points as possible, but in 20 minutes I will not get to them all and I will not name everybody. I apologise in advance.

On the comments from the noble Baroness, Lady Bennett, the right reverend Prelate the Bishop of Newcastle, and others that the Bill pushes people into poverty, let me be clear that nobody will find themselves pushed into poverty as a result of the changes in the Bill. People who are claiming benefits are not going to be subject to these changes. As I said at the start, we estimate that the benefits changes announced at the Spring Statement, revised to account for changes in the Bill, will now lift 50,000 people out of poverty in 2029-30. That is without any impacts of our record £3.8 billion investment in employment support. It is absolutely the case that those who qualify in future will get a higher standard allowance in universal credit and will still get a health top-up in universal credit, albeit at a lower level than now, as a result of the rebalancing. They will also get much more support in their journey towards work.

As for those with the highest needs, we recognise that some people will never be able to work. That is why those with the most severe, lifelong conditions whom we do not ever expect to be able to work, and those nearing the end of their lives, will receive the current higher rate of health top-up when they apply, and we will not be calling people in for pointless assessments.

My noble friend Lord Rook and the noble Baroness, Lady Stedman-Scott, focused particularly on young people. We have a special responsibility to make sure that nobody is written off before their adult life even begins. That is the basis of our new youth guarantee, to ensure that all 18 to 21 year-olds can access quality training opportunities, an apprenticeship or help to find a job. That will include targeted support for, for example, young people with learning disabilities. Our youth guarantee trailblazers are already doing brilliant work, testing and delivering new ways to help young people. We are working in partnership with all kinds of organisations, including the Premier League, Channel 4 and the Royal Shakespeare Company, to engage and inspire young people on their journey towards work. Perhaps the Salvation Army needs to be added to that list now—I can take a hint from both Benches.

My noble friend mentioned mental health. I reassure him that we are expanding mental health support teams, so that more schools can offer early, specialist help. All pupils will have access to mental health support in school by the end of the decade. Through the youth guarantee, we are improving access to mental health services for 18 to 21 year-olds.

A number of noble Lords mentioned the proposal we consulted on in the Green Paper, which is not part of this Bill, as to whether we should delay access to the health top-up of universal credit until someone is 22. I make no apology that we have to explore every option to make sure that young people are making the best possible start to their adult lives. However, there was a consultation. No decision has been taken, nor will it be taken until we have had the opportunity to review responses to the consultation. I reassure the House that, if we decide to go ahead with that, the savings will be reinvested in training and work opportunities for that age group and we will consider carefully what special provisions are needed for those young people for whom the youth guarantee will never be a realistic option.

I heard the comments of my noble friend Lord Hendy and others about the questions raised by the UNCRPD. I say to the House that we take our international obligations seriously. We have had a letter, we are considering the issues raised and we will respond in due course.

The noble Baroness, Lady Grey-Thompson, made some very important points about the way we debate these questions. I share her concern that the narrative can become regrettable and focused in ways that are just not helpful to the debate, never mind to the individuals. I reassure the noble Baroness, Lady Brinton, that my honourable friend the Secretary of State—I know this because I know her well—does not believe that disabled people are work-shy and wants to give them opportunities to move into work. I want to see a much better debate all round. We have to find a way, as a country, to be able to discuss reform of social security without running into problems where either we are not able to discuss it or we are doing it in ways that cause fear and anxiety, which do not need to be there. I hope we can all work together to find ways to do that.

I was shocked to hear of the website described by the noble Baroness, Lady Grey-Thompson, identifying Motability users. We have checked and the Motability Foundation has confirmed that no data was provided to the developers and any information returned is not accurate. I am glad that the website has been taken down, but the bottom line is that that should not be happening. That is not what this is about. It is shocking.

I agree with the noble Baroness that we need to make sure that we regain trust among those who use our services. A couple of noble Lords made points on this. We made clear in our Green Paper that this is our mission. We announced that we are reviewing our entire safeguarding processes and strengthening our clinical governance. I say to the noble Baroness, Lady Scott of Needham Market, that that includes the training of assessors, because we want to make sure that we get this right. A lot of time and effort is being invested in this and we have some really good people from the clinical side who are working with us internally in doing that. I am glad that the noble Baroness found the training helpful, even if it was not as long as she would want it to be. We are moving to bring back face-to-face assessments and will record them as standard. We think that those things taken together will help make a difference to the way the assessments happen and are perceived.

The noble Lord, Lord Elliott of Mickle Fell, touched on the challenge of making sure that the right jobs are there in the first place, and he is absolutely right. We are creating good jobs across the country, including using our modern industrial strategy and investing in such things as clean energy. However, our local Get Britain Working plans are based on the recognition that we do not have a single labour market in this country but a number of different labour markets that depend on local conditions.

I say to the noble Baroness, Lady Stedman-Scott, that this Bill does what this Bill does. If she wants to find hope and opportunity, she should go out there and look at Get Britain Working, the inactivity pilots, our youth guarantee pilots, and the independent review that we have commissioned from Sir Charlie Mayfield, former boss of John Lewis, into what employers can do to create inclusive workplaces where people can stay in work and not fall out of it when they hit health problems. There is a huge amount going on beyond this.

I take the point from the noble Lord, Lord Elliott of Mickle Fell; he is not the first person to make it to me. I will share it where it can best be used. We want to find ways of making sure that there are jobs there for people who want to get into them and that we can support them to do it.

Fluctuating conditions were mentioned a lot. This is an area where there has clearly been some confusion. Let me clarify for noble Lords who are not familiar with this that the work capability assessment is not specific to a condition; it is based on the impacts of a condition rather than the condition itself. Some conditions will have different impacts on different people or at different stages of a person’s life. The assessment includes provisions to ensure consideration of how someone’s condition might fluctuate, hence the use of the terms “reliably” and “repeatedly” in some of the descriptors. This Bill does not change that. The idea that we have somehow changed that through using the word “constantly” is not the case. In some of the descriptors embedded in legislation, the concept of fluctuation in a condition is explicit within the use of those terms “reliably” and “repeatedly”. The bottom line is that, if a person cannot repeat an activity within a reasonable time, they should be considered unable to complete the task at all. I hope that is reassuring.

The severe conditions criteria are existing criteria which we are now going to use to determine who gets the higher, protected amount of health top-up. The wording in the Bill reflects how the functional tests are applied at present, and those tests take account of fluctuations. The healthcare professional has to look at how someone can undertake a task; if they cannot do it reliably and repeatedly, they should be assumed to be unable to complete it at all. I hope that provides reassurance.

NHS diagnosis came up a couple of times, so I would like to take the opportunity to clarify this. To meet the severe conditions criteria, the condition needs to be recorded somewhere in the NHS, following a proper clinical investigation and a formal medical diagnosis in line with NHS best practice. That does not mean the initial diagnosis has to be done by the NHS, but it has to be recorded somewhere in the NHS system. For a person who has a severe, lifelong health condition, their diagnosis will be in their GP record, even if it was made privately. I hope that helps reassure noble Lords.

A number of noble Lords raised the issue of unpaid carers. I once again put on record how much the Government appreciate their work and contribution. The increase to the UC standard allowance will benefit around a million unpaid carers. For any carers currently getting the universal credit health top-up, this Bill will not change that. My noble friend Lady Andrews and the noble Baroness, Lady Tyler, gave me a strong challenge on the review of PIP being co-produced with disabled people and other stakeholders. I reassure them that that will include carers’ organisations, so the voices of unpaid carers will be heard in that process.

On the two-tier system—I hate this phrase anyway, for all kinds of reasons that will be obvious—it is really common in social security when you make a significant change that some people on an existing system will stay on the old terms. Take the example of the limited capability for work premium in universal credit, which the last Government changed in 2017: people who were getting it then are still getting it today and will carry on doing so. There are only two ways to do this: either you change it overnight for everybody or you allow those already getting something to carry on getting it for a time while you change it. We cannot have both no two-tier system and no cliff edge. All this is doing is allowing people who have already got used to this to carry on with it, and adjusting it, which is the right thing to do.

The noble Viscount, Lord Younger, asked for details on exactly what the employment support will be. I do not have time to go into this now, but I reassure him that we are scaling up fast, with £600 million in 2026-27. The support we are delivering includes Connect to Work, WorkWell, nine inactivity trailblazers and access to 1,000 pathways to work advisers. I assure him that anyone affected by the reduction of the UC health top-up will be offered work, health and skills support through an adviser.

A number of noble Lords talked about the challenges we are facing in the system. It is true that making our social security system sustainable is a real objective for this Government, as it must be for every Government. That needs action on various fronts. It needs action to reduce the drivers of ill health, as the right reverend Prelate the Bishop of Newcastle said. It needs action, which we are doing, through our record levels of investment in and reform of the NHS. It needs investment in jobs in poor areas and in employment support, all of which we are doing at scale. It also needs reform of the benefits system, which we are committed to doing.

In response to the noble Viscount, who wants everything to have happened yesterday—even though I am not sure that characterised his Government’s period in office—for reforms of this scale, we need as far as possible to take people with us. I want these reforms to last for generations to come, because I want the welfare state to last for generations to come. Let us try to get this right, work together and be sensible about change. The real prize here is long-term reform and that is what we are shooting for.

A couple of noble Lords asked whether we are still saving money. Obviously, the removal of the PIP measure from this Bill will come with a cost, but the updated impact assessment shows that the Bill will still deliver some savings by 2029-30. However, the OBR will certify these as part of its next economic and fiscal outlook.

My noble friend Lady Ritchie asked what would happen to people on ESA. Existing claimants and anyone declaring a health condition before 6 April next year, and who become entitled to LCWRA because of that declaration, will get the higher rate. That includes claimants who currently receive income-related ESA and migrate to universal credit with no break in their claim. I hope that reassures her on that point.

The noble Viscount, Lord Younger, asked about fit note reform. It is not working, so through interventions such as WorkWell, we are testing different approaches to the role it can play as part of a joined-up work, health and skills system. He also asked about the right to try regulations; we aim to have those in place before April 2026. I hope that reassures him.

The noble Baroness, Lady Smith, asked about the position in Wales. Obviously, we published impact assessments that looked at Britain as a whole, because UC is reserved in Scotland and Wales, so the policies are not specific to a country—but I take her point. The Department for Communities in Northern Ireland has published detailed impact assessments as well. In response to her comments, we want to make sure that the positive changes in the Bill make a difference as far and wide as possible, but I stress again this Bill is only about the changes I have described so far. Some of our wider programmes are devolved and some are reserved, and we are absolutely committed to engaging closely with the devolved Governments to make sure we join those up, so that the benefits will spread across Wales as well as other parts of the United Kingdom.

I hope I have addressed as far as I can the points made about the impacts. On process, I know noble Lords do not like it being money Bill. I am sure noble Lords know that this was not the Government’s decision. It was a decision made by the Speaker of the House of Commons, on the advice of the authorities. I can only say to noble Lords that if Governments chose to make Bills money Bills, I suspect in all cases we would see an awful lot more of them. But this was not the decision of this Government at all.

I cannot pick up all the points that were raised. Let me say that we have published impact assessments; we are confident that the Bill complies with the Equality Act 2010; and we have engaged, and will continue to engage, with disabled people and their organisations. To be clear about the process on the Timms review, we expect it to conclude by autumn of next year and we are absolutely committed that it will be co-produced with disabled people and others to ensure that a wide range of views and voices are heard. We have already started, and will engage widely over the summer, on the details of the process and co-production. The review is reporting to the Secretary of State, but she has committed to reporting its findings to Parliament, so they will be coming here.

I hope I have addressed as many of the points as I can in the limited amount of time. I want to say a couple of things. One is that I am not ashamed to be part of a Government who listen, even if people have to shout quite loudly. Sometimes, we have to find ways of listening as carefully as we can. One of my noble friends suggested that you legislate at haste and repent a leisure. Well, we have had plenty of time to reflect on how we shape this Bill in the first place and I am really happy with it.

However, I want to stress the Bill has two parts. The PIP discussions will carry on, in the context of the Timms review, but this half of the Bill is about reforming universal credit, and that is absolutely worth doing. It is a prize worth having and we have to carry on with it. I am really proud that we have been able to push ahead and look at these details. The real difference is going to be made in the lives of people on the ground, in their engagement with our work coaches, the various services we can provide and the programmes we refer them to. We are trying to invest in getting people’s lives to be better.

In the end, we have to hope. We acknowledge that there will be some people who will never be able to work, and they should be supported. But there are plenty of other people who could have the opportunity to work if we could give them the right support and make sure they had the confidence to try a job; if we can get employers to listen and to take them seriously, and to want to bring on people with a history; if we can provide them with the skills or health support they need. We are setting out to join up all those things. For far too long, they have been separate. We have to join up health with skills, education and social security. If we can do that, the prize is enormous.

I do not want to write off people at 18. I do not want to write off people who have been given benefits for 20 years but nobody comes near them to offer help—that is not how I want it to be. I have heard the concerns around the House from different quarters and from all directions, and I understand that people worry about this. I very much hope that when not only this Bill but the Government’s programme of reforms get under way, people will begin to see that we really can make a difference—and that is a prize worth having.

20:59

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the Minister for her typically comprehensive response within the limits of the time available. I thank everyone who has contributed to this extremely rich debate.

Your Lordships’ House has done what we can within the limits of the procedure allowed us, and I particularly note the highlights of the maiden speech and the valedictory speech. However, this debate has inevitably left many questions unanswered. The noble Baroness, Lady Lister, noted that what we heard from the Minister today and what we heard in the other place do not square with what is actually in the Bill on constant and continuing. Had we had further stages of the Bill here, we would have been able to explore that at depths that we simply have been unable to do today.

I note the equality points about age, raised by the noble Baroness, Lady Browning; about gender, raised by the noble Baroness, Lady Brinton; and about nations, especially Wales, raised by the noble Baroness, Lady Smith—and we did not even get into the regions of England. A particular highlight was the strong and powerful contributions of the noble Baronesses, Lady Grey-Thompson and Lady Brinton, in which they attacked some of the disgraceful stigmatisation and victim blaming that this debate has almost been free from, with a couple of exceptions. We have seen far too much of that in the public debate and in the other place.

The issue of finances is still hanging. The noble Lord, Lord Hendy, rightly pointed out that the justification for the Bill, when we started, was to cut government spending. The noble Lord, Lord Sikka, highlighted that we really have no idea what impact the Bill will have on raised costs for the NHS, social care, local councils and lots of other people. I should declare that I am a vice-president of the Local Government Association.

On jobs, the noble Lord, Lord Elliott, said that we need to do more to encourage employers. I am afraid that I am with the noble Baroness, Lady Bryan, in thinking that employers should provide jobs, ensure that those jobs are open to disabled people and make appropriate accommodations.

The right reverend Prelate said a very powerful phrase: we have to embrace those who do not fit the model of financial productivity. People can contribute to our society in many ways. The noble Baroness, Lady Stedman-Scott—I am sure that she did not mean to say this—spoke about a sense of purpose coming from paid work. I am sure she will acknowledge, as all sides of this House have acknowledged, that there are people who will never be able to take paid work, but those people’s lives can still have a sense of purpose. They can still contribute to communities—through caring and through volunteering—if they get the appropriate support.

The tone of this debate has very much been one of regret. The people listening to this debate need to hear as much support as they possibly can, so I beg leave to test the opinion of the House.

21:03

Division 2

Ayes: 17

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Liberal Democrat: 9
Crossbench: 3
Green Party: 2
Plaid Cymru: 1
Non-affiliated: 1
Democratic Unionist Party: 1

Noes: 120

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Labour: 116
Conservative: 3
Bishops: 1

21:12

Bill read a second time. Committee negatived.

[Baroness Sherlock (Lab)]

My Lords, social security is transferred in Northern Ireland, but there is a long-standing principle of parity between the social security systems of the Northern Ireland Executive and the UK Government. We want to ensure that Northern Ireland will also benefit from these important changes, and have included provision for Northern Ireland, engaging with the Department for Communities in the usual way regarding legislative consent.

The Northern Ireland Minister for Communities has been clear that, although the Northern Ireland Executive disagree with these reforms and therefore did not put forward a Legislative Consent Motion, it is not feasible or affordable for the NIE to diverge from the UK Government. Reluctantly, the UK Government have therefore decided that there was little choice but to proceed without consent from the Northern Ireland Assembly. This is not a decision that the UK Government have taken lightly, nor does it indicate a general change in our commitment to the Sewel convention. We will continue to engage closely with the devolved Governments as we move forward, including on the Timms review.

Standing Order 44 having been dispensed with, the Bill was read a third time and passed.

House adjourned at 9.14 pm.