The Government is looking at making changes to the benefits system after new figures show that three million people are now managing to claim benefits without any obligation to look for work

Three million individuals are currently claiming benefits without any obligation to seek employment. Labour Party government ministers argue that new figures highlight the need for a system overhaul, as they believe it’s wasting potential.

Liz Kendall, the Secretary of State for Work and Pensions, stated: “too many people are shut out of work, with no support, no help and no prospects” arguing that these figures underscore the necessity for a comprehensive reform of the benefits system. Consequently, Ms Kendall is considering abolishing the highest category of Universal Credit health claims, known as limited capacity for work or work-related activity, which provides claimants an additional £5,000 annually and exempts them from any obligation to look for work.

Ms Kendall said: “Many sick and disabled people tell us they want to work with the right support. But for too long, they’ve been denied a fair chance to get jobs. The potential is being wasted, businesses are missing out on untapped talent and our economy is suffering. I’m determined to change this.”

She pledged to present “proposals to reform the benefits system within weeks, so that it genuinely supports disabled people and people with long-term health conditions into work, brings down the benefits bill and grows the economy”. Stephen Evans, its chief executive, noted: “While the universal credit numbers include those moving off older benefits, our own analysis shows the numbers not required to work because of sickness or disability is up by 37 per cent since Covid.

“There are now more than twice as many people in this group than there are claiming benefits while seeking work, and the number has been rising since the pandemic.”

He explained that this is due to “there are more claims, they are more likely to be successful and barely anyone leaves these benefits. Just 1 per cent who are economically inactive due to long-term sickness are in work six months later, compared with 33 per cent for those seeking work.”

Sir Stephen Timms, the disability minister, highlighted that taxpayers are being asked “to foot an ever-increasing benefits bill” and pointed out that with costs expected to surge by nearly £20 billion, the welfare state has become “a failure we cannot afford to ignore”. James Taylor from the disability charity Scope countered by saying there isn’t a “huge number of new people claiming benefits”.

He argued: “Our welfare system is not working. But the worst thing the government could do is cut benefits for disabled people or make the system more punitive. Doing so will push disabled people into poverty, not jobs.”

He added, “Many disabled people want to try work, but the fear of losing benefits if it doesn’t work out, and a lack of tailored employment support, make it incredibly difficult.”