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Government Record on Education, Employment and Welfare

My Lords, my text for this simplistic opposition attack on the Government is simple: I will point out the legacy of the noble Baroness who has just spoken. She was in the Cabinet for six years. On 20 January 2025, the Economic Affairs Committee of your Lordships’ House produced a

42-paragraph letter to the Secretary of State for Work and Pensions. This followed a short inquiry to understand what was driving the massive change to incentivise benefits and inactivity under the Tories. Time permits me to mention just two paragraphs.

Paragraph 1 read:

“Spending on incapacity and disability benefits has risen by more than 40 per cent in real terms since 2013 … This is around 20 per cent higher than the UK defence budget and equal to 22 per cent of the total health budget. Spending on incapacity and disability benefits is forecast to rise to £100.7 billion … pushing the total welfare bill above £370 billion. The latest figures show that around 3.7 million people of working age receive the health component of Universal Credit … 1.2 million more than in February 2020. As the Office for Budget Responsibility note, since before the COVID pandemic this rise has been uniform across age groups. This is in the context of there being 1.51 million people registered as unemployed”.

In Paragraph 7 of the letter, the committee said:

“While it is difficult to unravel the data to provide a clear picture of the level of economic inactivity, administrative data show that spending on health-related benefits has risen. This has occurred in all parts of the country and in all age groups. As the OBR notes, ‘The proportion of the working-age population in receipt of an incapacity benefit reached a post-financial crisis high of 7.0 per cent in 2023-24 and is forecast to reach an all-time high of 7.9 per cent in 2028-29. This reverses the steady decline in caseload prevalence from the early 2000s to mid-2010s’”,

which was Labour’s time in office. It was a complete reversal of what had been happening under the Labour Government.

My final quote—I want to keep this short—is from an interesting piece by the Financial Times data expert John Burn-Murdoch, “What if the UK isn’t actually the sick man of Europe?”, from 6 December 2024. Time permits me to read only the final paragraph of his piece:

“It turns out the apparent rise in Britain’s illness-related inactivity is mostly not about deteriorating health, but about incentives within the benefit system”—

incentives that were put there by the Government in which the noble Baroness served in the Cabinet for six years. To finish the quote:

“Policies focused on the latter stand the best chance of getting Britons working”.

In other words, it is an absolute con. There was good progress under the Labour Government until 2010, and after that it reversed. We on the Economic Affairs Committee could not understand it. We thought we had got rid of the system whereby it paid not to work. Everybody around the table was gobsmacked, yet it had been made possible to be better off not working under the Tory Government of which the noble Baroness was a key member.

12.07 pm