Universal Credit Bill

Lord Liddle Excerpts

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

[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.