Welfare Reform

Lord Grayling Excerpts

Wednesday 2nd July 2025 Lords Chamber

[Baroness Sherlock (Lab)]

I am grateful to my noble friend. Any official decisions will be made in the Budget in the usual way. They are matters for the Treasury. To reassure her on the specific point, the Bill says that we are guaranteeing an above-inflation increase to the UC standard allowance in each of the next four years. That means that, if you are a single person aged 25 or over, the allowance will increase to £106 a week by 2029-30. That is unheard of. As the IFS has said, it is the first time in decades that we have increased beyond inflation the rate of universal credit. So I hope she is not only reassured but delighted.

[Lord Grayling (Con)]

My Lords, the work capability assessment was introduced by the last Labour Government. Back in 2010, when I was Employment Minister, I and my noble friend Lady Stedman-Scott worked hard to improve it. I believe very strongly, having sat through many assessments, that some kind of challenge is needed in the system to make sure that those who have the potential to work are given the right incentives and push to do so. The abandonment of the work capability assessment leaves a vacuum in the system. How will the Government fill it?

[Baroness Sherlock (Lab)]

I probably have not explained this as well as I could have—I apologise to the noble Lord. We absolutely regard as the single biggest challenge the fact that the incentives are in the wrong place when it comes to universal credit. So we are doing two different things. First, we are separating support from your capability to work, abolishing the work capability assessment and looking at how a single assessment can be used to make the appropriate judgments, giving support on the basis of need.

Secondly, we are making absolutely sure that we do not put you in the position of there being perverse incentives, so you end up making decisions that would not be good for you in the long run. There are 200,000 disabled people who reckon that they could work now with the right support and would like to. We should start by giving the right support to those who want to work but simply are not able to. The noble Lord is right that we should be challenging everybody, making sure that they are making the right choices and supporting them, but the first thing to do is to get the incentives in the right place, or it will never work.