Welfare Spending

Stephen Timms Excerpts

Tuesday 4th November 2025 Commons Chamber

[Helen Whately]

The hon. Gentleman thinks he is so clever, but I am sorry to say this is a whole lot more serious than that. [Interruption.] I am glad Labour Members liked that. The fact is, if the hon. Gentleman looked a little further than his time in politics, back to 2010, he would know that the welfare bill and unemployment figures came down, and that we had the huge reform of universal credit, led by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), which made a huge difference. [Interruption.] As has been chuntered by those on the Government Front Bench, yes, of course, the pandemic made a difference. We had a set of reforms going on, and then those on the Front Bench and some of their predecessors—there has been a certain amount of turnover—came in and gave up on those reforms. Where are we now? There are no savings and no plans to get people off welfare and into work.

However, it does not have to be this way. The country knows that this is not working, and people want change. They want a fairer system: one where people who do the right thing are rewarded; where work does pay; where people taking personal responsibility for themselves and their family makes sense; where there is help for those who need it, but not for just anyone who might fancy it; and where welfare is a safety net, not a way of life. It might be hard for Members on the Government Benches to hear, but this is what people out there want. They want it now—let us get on with it.

The Conservatives have set out our common-sense proposals to start fixing the welfare system. We would stop sickness benefits for people with lower-level mental health conditions like anxiety and reform Motability, putting an end to taxpayer-funded cars for people who have conditions like ADHD and tennis elbow. We would bring back face-to-face assessments, which are going down under this Labour Government, and change the sick note system so that it does not just funnel people out of the office and on to benefits. We would prioritise Brits in our welfare system, stopping people with indefinite and limited leave to remain claiming benefits. Of course, we also believe in retaining the two-child benefit cap, because it is fiscally responsible and fair. Removing the cap would cost more than £3 billion and would be deeply unfair on families who are not on benefits—the couples who decide they cannot afford another child, but would pay taxes for someone else to do just that. The Conservatives are the only party fully committed to the two-child benefit cap—no ifs, no buts.

[The Minister for Social Security and Disability (Sir Stephen Timms)]

I have read somewhere that the list of things the hon. Lady has gone through would, the Conservatives estimate, save £23 billion. Part of that is from housing benefit. Can she tell us how much of the £23 billion would be saved from housing benefit?

[Helen Whately]

I thank the right hon. Gentleman for that question. As he says, we have earmarked potential savings of £23 billion, and housing benefit is one area. There is the other set of savings that I have just gone through. I am very happy to go through some of our sums and how we have got to those figures with him. As I have said to him, I believe that this Government should be picking up on our suggestions, because that is how they could bring down the welfare bill and avoid what we saw the Chancellor clearly rolling the pitch for this morning: tax rises at the Budget.

Times are hard. I do not want the Government to put up taxes. I do not want them to keep spending other people’s money on welfare, because we all know that one day it will run out. I do not want them to keep people living a life on benefits rather than being in work. That is why I have been so clear about what they could and should do.

I have heard Labour Back Benchers say in this Chamber, “I didn’t come here to cut benefits”, and that is why we have offered to help. The Leader of the Opposition, the shadow Chancellor and I have made a big offer to the Government. We will help them make welfare savings, and we will work with them in good faith to get the welfare bill down and get people off welfare and into work. Labour Back Benchers do not want to make the tough decisions on welfare, but our door is open. We will work with the Government in the national interest. It is not too late to make those bold decisions and make serious savings. A vote for our motion is a vote to get Britain’s welfare system back on track, to get the welfare bill under control, and to set out on a moral mission to get millions off welfare and into work.

[The Minister for Social Security and Disability (Sir Stephen Timms)]

I enjoyed listening to the shadow Secretary of State’s fierce critique of the state of the benefits system that was left behind after 14 years of Tory government. She made some good points about it. By contrast, this Government are building a welfare system that is proactive and pro-work, has opportunity at its heart, and will change lives for the better—in rather the way she suggested that the system needs. For every person we can help into good work, it will mean a better life for them and better mental health and finances. It will be better for the public purse as well.

Getting people off welfare and into work requires an active approach, and we do have a plan. The system left behind by the last Government of passive benefit processing was simply not up to the job. That is why they left behind, as the shadow Secretary of State said, nearly a million young people not in education, employment or training, and 2.8 million people economically inactive through long-term ill health. We are determined to put those failures right.

[Marsha De Cordova (Battersea) (Lab)]

My right hon. Friend is making a great introduction, because the Conservatives clearly need to be reminded of their failures over 14 years in government. During their time in office, the disability employment gap remained stubbornly at 30%. Does my right hon. Friend agree that it is only this Labour Government who will do all they can to ensure that disabled people have opportunities for work?

[Sir Stephen Timms]

My hon. Friend is absolutely right. The disability employment gap fell steadily under the previous Labour Government, but it has been stuck at about 30% ever since 2010. There was one moment in those 14 long years of Tory rule when it looked as though they planned to do something about it. In the middle of the 2015 general election campaign, David Cameron announced a target of halving the disability employment gap. It was like they suddenly woke up at that moment, but as soon as that election had been safely won, they scrapped the target. They just went back to passive benefit processing again.

[Jim Shannon (Strangford) (DUP)]

The Minister is a good man, and I mean that sincerely. I think he understands and shares the faith that I have when it comes to looking after those who are less well off. Every day in my office I meet constituents who have disabilities or complex health needs, anxiety and depression or severe mobility issues and people whose health problems are impacting their families. They are burdened with financial pressures. Those who cannot cope with life must not be penalised. Can the Minister reassure us that the vulnerable will not become a target for the Government or indeed anyone in this Chamber?

[Sir Stephen Timms]

Yes, I can. I will come on to talk about that in a couple of minutes.

In contrast to the passive approach of the last Government, we will be active. We are investing in and joining up work, health and skills support. We have brought adult skills and apprenticeships, further education, training and careers into the DWP so that we are better able to give people the skills to thrive in today’s economy and to enable them to move into good secure jobs.

[Bradley Thomas (Bromsgrove) (Con)]

At the minute, an estimated 13 million households in this country—just over 50% of all households—are net recipients from the state, rather than net contributors to it. What would the Minister expect that figure to be by the end of this Parliament?

[Sir Stephen Timms]

The hon. Gentleman makes another interesting reflection on the state of the system left behind by 14 years of Tory government. We are going to be making progress, as I said.

Our plan will help deliver our ambition not just for jobs but for national renewal by building new homes, making the NHS fit for the future and powering the shift to green energy. Among people of working age, those with low or no qualifications are some 2.5 times more likely to be out of work than those who are better qualified. Just closing that gap would mean a million extra people in work.

But skills are not the only barrier; for many, it is ill health, and we are determined to get people back to work and back to good health. We will open up more opportunities for people who have been out of work because of ill health in the past with WorkWell employment advisers embedded directly in healthcare teams, from GP surgeries to mental health services.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

Will the Minister give way?

[Sir Stephen Timms]

I will make a bit more headway first.

Connect to Work will go to the end of the decade to support 300,000 disabled people and people with health and other complex barriers to employment to get into and get on in work. Our Pathways to Work guarantee, backed by an additional £1 billion a year by the end of the decade, will bring all that together with personalised work, health and skills support for anybody on out-of-work benefits with a health condition or disability who wants that support.

We already have 1,000 new Pathways to Work advisers in place, working in jobcentres across the country to help disabled people. A few weeks ago I met a couple of them in Edinburgh, and they told me of the positive reactions from the people they ring up. The system gave up on those people years ago, but we have not given up on them.

[Dr Evans]

The Minister mentioned WorkWell, which is a fantastic scheme introduced in 2023 that dealt with 59,000 people through £64 million of Conservative Government investment. I am glad that the Government are taking that forward and looking to expand it. My concern as a GP is about trying to get more people on the premises. Where will the work coaches go when premises do not have the space? That delivery is really important. Will he explain what has happened from the pilots to where we are now and how this will be taken forward?

--- Later in debate ---

[Sir Stephen Timms]

The hon. Gentleman raises a good, practical point. Quite a lot of GP surgeries certainly do have space and welcome work coaches or an adviser on to the premises, but he is right that that does not work everywhere, so we need to be flexible and have a local approach for each area. That is what Connect to Work will deliver.

We also need to stop people from falling out of work unnecessarily in the first place due to ill health. Stopping work is often not in the interests of either the employee or the employer, but far too often it happens by default. Therefore, Sir Charlie Mayfield has been leading the Keep Britain Working review on how Government and businesses can work together for more inclusive, healthier workplaces. He will report his findings very soon.

This active approach is particularly important for young people, as the shadow Secretary of State suggested in her opening remarks. After 14 years, so many were left not in employment, education or training, and being out of work for a long time at the start of what should be working life does long-term damage to their health, earnings potential and prospects. There are obviously consequences for the social security system as well.

If we do not get somebody on a productive path early on, it can be really hard to change course further down the line, so we are expanding the number of youth hubs, partnering with sports clubs to get help to people in the community and developing a youth guarantee to ensure that 18 to 21-year-olds are earning or learning. As the Chancellor announced last month, learning from the success of Labour’s future jobs scheme, that will include a jobs guarantee. Our youth guarantee trailblazers are up and running, innovating and testing out the best ways to join up support and make the most of young people’s talent and potential, from mental health support to flexible work experience sessions. Those trailblazers will inform the national roll-out of the guarantee so that everybody has the chance to start off their working lives on the right foot.

We are reforming jobcentres by introducing the jobs and careers service: a universal service, moving away from one-size-fits-all and offering much more personalised support. We are also testing changes to the claimant commitment as we look to free up work coaches.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I am listening carefully to everything the Minister says, including about being productive. The key for him is that for the first time sickness benefit is now within universal credit, which also includes all other benefits. That gives a face-to-face opportunity with all these staff. As he gets more people back to work—particularly those who have mental health problems such as depression and anxiety, for which work is a health treatment, as the health service will say—does he anticipate calculating on the back of that whether any money will be saved as a result? If so, will he at some stage come up with a plan for saving that money?

[Sir Stephen Timms]

I do envisage that, as people get back to work, there will be savings on social security. I think we will see at the Budget projections from the Office for Budget Responsibility of future moves into employment as a result of the changes that we are making, and savings will certainly arise. We want our work coaches, as the right hon. Gentleman has just pointed out, to spend less time on bureaucracy and more time on what they do best, which is giving people the benefit of their expertise and helping people move closer to work.

Good work will also be a key part of the child poverty strategy, which we will bring forward by the end of the year. We will tackle child poverty by increasing family incomes, reducing family costs, building financial resilience and improving local support. Some people will remember that I took the Child Poverty Act 2010 through Parliament, with all-party support at the time. It was quickly scrapped by the coalition Government and the number of children growing up in poverty has gone up by 900,000 since then. Welfare spending has also rocketed. Reducing both child poverty and welfare spending are not opposites.

[Mr Luke Charters (York Outer) (Lab)]

Will my right hon. Friend join me in recognising the benefit to the labour market of the roll-out of 30 hours of free childcare? I met a single mum in my constituency who is taking on more hours to support her family. That will help her children get out of poverty, thanks to this Government’s efforts.

[Sir Stephen Timms]

My hon. Friend is absolutely right. That is a welcome and much-needed step.

The early years are crucial to somebody’s life chances. Ensuring that children grow up happy, healthy and able to fulfil their potential is certainly, to borrow a phrase from the motion, “a moral mission”. However, it is also about reducing demand on social security, instead of sitting on our hands like the last Government and leaving the system to pick up higher costs further down the line.

The child poverty strategy will build on our cross-Government approach to lifting people out of poverty through rolling out free breakfast clubs, raising the national minimum wage and, as my hon. Friend the Member for York Outer (Mr Charters) points out, expanding free childcare and free school meals to all families on universal credit. It will be an ambitious strategy and in developing it we will consider all the levers available to give every child the best start in life.

To make work pay: that was what universal credit was intended to do. Yet it was left with perverse disincentives to work in the system, forcing people, as many did, to aspire to be classified as sick in order to qualify for a higher payment. We have addressed that by rebalancing the payments in universal credit, alongside other reforms. The system should not force people to aspire to be classified as sick; it should promote and encourage work and provide support to make work feasible.

As the shadow Secretary of State kindly mentioned, we are progressing the review, which I am responsible for.

[Dr Evans]

Will the Minister give way?

[Sir Stephen Timms]

I will make a little more headway. The review will be co-produced with disabled people, to ensure that the system supports disabled people to achieve better health, higher living standards and greater independence, including through work. We will also carry out more face-to-face assessments over the next year, boosting the number of health professionals working in assessment centres. Face-to-face assessments were stopped for understandable reasons during the pandemic, but they were never really brought back. The places where they were carried out were sold off and we are having to reinstate and rebuild that service.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

The Minister talks about perverse disincentives and aspiring to be classified as sick. Does he accept that, with sickness benefits, someone will get £2,500 more than if they are on the national living wage full time? If that is the case, which it is, what is his plan to reverse that perverse disincentive?

[Sir Stephen Timms]

We have made major changes in the Universal Credit Act 2025, which will take effect in April of next year. We are making the changes that are needed.

Lastly, when building a more active welfare system, we need to ensure that every penny we spend goes on the support that it is designed to provide. That is why the Public Authorities (Fraud, Error and Recovery) Bill is working its way back through this House under the guidance of the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Stretford and Urmston (Andrew Western), as we speak. In that Bill, there are new powers for the Department to tackle fraud and error, so that we can realise £1.5 billion in benefits by 2029-30. Those are among wider measures that we expect will save £9.6 billion over the same period. That is needed, given that on the previous Government’s watch, in 2023-24, fraud against the public sector stood at an estimated £55 billion. In the same year, benefit fraud alone was £7.3 billion. There is a lot to be done.

[Carla Lockhart (Upper Bann) (DUP)]

Nothing frustrates genuine welfare claimants more than seeing claimants who are not deserving, or who are defrauding the system. In Northern Ireland, the cost of fraud is £240 million per annum and, to be honest, that is just the tip of the iceberg, given the restrictions around investigations. In Northern Ireland, the Communities Minister has started naming and shaming. Does the right hon. Gentleman agree that there needs to be a UK-wide strategy on fraud to ensure that those in real need do not miss out?

[Sir Stephen Timms]

It is vital that we make sure that those in real need do not miss out, and I can reassure the hon. Lady that I am in fairly regular contact with her colleague in the Northern Ireland Assembly. These are certainly things that the two Governments need to discuss.

[Jim Allister (North Antrim) (TUV)]

Will the Minister give way?

[Sir Stephen Timms]

I am going to make a bit more progress.

We have seen what happens when social security is not managed properly. We have seen the consequences for child poverty and for the many thousands denied the opportunity to work—people who want to work, and who could work, with the right support. We are taking action now to give people the best chances in life, so that they can support themselves and their family. We are delivering on our plan to make work pay, including by removing the work disincentives from universal credit. We are joining up support, so that people get proper help into work. We are giving children and young people the best possible start in life and are setting them up to succeed in future. Unlike the previous Government, we are not resigned to failure. We are investing in success, in work, in health, and in skills support to provide hope for a better future. We are actively helping people along their own path to work, and creating an opportunity welfare state. We have made a great start, but there is a huge amount still to do, and I welcome this chance to seek the House’s support for our mission.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson, Steve Darling.