SINGAPORE: An ex-Prime Minister has called for a block on people with anxiety, depression and ADHD from claiming benefits, highlighting a growing rift within Labour over welfare reform.
The former prime minister’s think tank urged the Government to impose an “emergency handbrake” on people claiming sickness and disability benefits to save billions of pounds a year.
The current system is now perceived as “vulnerable to misuse”, according to the Tony Blair Institute (TBI).
It warned that “sickfluencers” were fuelling the problem by offering advice on social media on how “best to maximise chances of a successful claim”.
The TBI highlighted that four million people were now signed off work with ill health, as it blamed a broken system for “entrenching welfare dependency” by parking people on benefits indefinitely.
“[This] points to a welfare system no longer fit for purpose,” the TBI warned in a report.
It urged Labour to introduce immediate legislation to slow a “proliferation” in claims linked to mental health, which has fuelled a surge in people signing on to sickness and disability benefits such as Universal Credit and Personal Independence Payment (PIP).
Official figures show the cost of health and disability benefits hit £56.9bn in the current financial year, up from £37bn before the pandemic.
Under the TBI’s proposed regime, new laws would automatically rule that “non-work-limiting” conditions such as anxiety, depression and ADHD would “no longer attract cash benefits”. Instead, the money would be diverted towards treatment.
While it stressed there would be no blanket ban on claims, the TBI said claimants would have to support them with medical evidence.
These people would also be prioritised for face-to-face assessments and more frequently reassessed before more root and branch reform.
“The handbrake is based on a simple idea: there are certain conditions that in the vast majority of cases do not limit an individual’s ability to work, and the default presumption should be that these non-work-limiting conditions no longer attract cash benefits,” the institute said.
“The British welfare system is now a problem the Government cannot afford to ignore. Reducing the number of incapacity and disability benefit claimants must be an explicit short-term objective of Government within this Parliament.”
Polling commissioned by the TBI showed widespread support for restricting mental health benefits, with broad agreement across the political spectrum that the welfare system was now “too easy to access”.
Only Green Party voters said the system should be made more generous.
Rachel Reeves, the Chancellor, was forced to water down plans to cut benefits last year after a humiliating backbench rebellion.
Reviews by Alan Milburn, the former health secretary, and Sir Stephen Timms, the disability minister, are likely to pave the way for a fresh drive towards reform, although this is not expected until next year as claims continue to rise sharply.
Almost 6,000 people out of 21,000, who became eligible for disability benefits in January alone, cited anxiety, depression, general back pain, fibromyalgia or ADHD as their “main disabling condition”.
The Department for Work and Pensions (DWP) said a further 2,900 PIP claims were linked to supporting people with autism, now by far the single biggest reason for claims.
This suggests that around half the increase in monthly claims is linked to conditions that would no longer automatically qualify for cash benefits under Sir Tony’s proposals.
However, the think tank insisted that people who needed support would still receive it.
Sir Mel Stride, the shadow chancellor, accused Ms Reeves of “bankrupting Britain”. He said: “It’s telling that even Tony Blair’s think tank is calling for an emergency brake to stop benefits being paid to people with anxiety and depression.
“While the Tony Blair Institute recognises the dangers of Rachel Reeves’s benefits bonanza, Labour continues to borrow billions to pay for it.”
Alex Baldock, Currys’ boss, warned that Ms Reeves was making it much harder for people on benefits to get back into the workforce.
He said the Chancellor’s £25bn National Insurance tax raid had destroyed a fifth of its profits “overnight”, limiting the company’s ability to hire new workers.
Mr Baldock added: “What does that do? What it does, first of all, is it disproportionately hits the very entry level and the flexible jobs that are best suited to people being reintroduced to the world of work.”
It came as a separate analysis by the Resolution Foundation warned that Britain’s “hands-off” benefits system and a lack of on-the-job training had driven youth worklessness to one of the highest rates in Europe.
The number of 18 to 24-year-olds claiming welfare who have no requirement to engage with DWP has increased from 160,000 to 300,000 since 2019, according to the Left-leaning think tank.
It said this contrasted sharply with countries that had low levels of young people not in employment, education or training (Neet), where this approach was a “last resort”.
It also criticised a lack of vocational training, as it warned that youth inactivity was now worse than in countries such as Spain and Greece.
The TBI said it was confident its proposals would be “unlikely to be successfully challenged under equalities law” and could be brought into law immediately.
It added: “Universal Credit was designed around the principle that work should always pay more than welfare. In practice, however, the combination of additional health-related support and disability benefits can narrow the financial gains from moving into work.
“The system’s incentives tilt away from work. Modest financial gains, the perceived risk of losing benefits and limited support for returning to work all contribute to this.”
A spokesman for the DWP said: “We agree that the system we inherited left too many people written off – without treatment or proper help into work. That is a failure the Government is determined to fix, through reforms with opportunity at their heart.
“We’re already acting: we’ve rebalanced Universal Credit, saving nearly £1bn, increased face-to-face assessments and improved use of NHS evidence – all while ensuring those who genuinely can’t work are always protected.”