‘Britain can’t afford to delay welfare reform any longer’

The Tony Blair Institute is calling for an “emergency handbrake”: a targeted reset to slow the fastest-growing pressures on the welfare budget by tightening access to health-related benefits.

At its core is a focused reform: the creation of a new category of “non-work-limiting conditions”. These would be defined on the basis of robust clinical and labour-market evidence showing that certain conditions are typically compatible with work – and that, in many cases, remaining in or returning to work supports better health and recovery outcomes.

For people with common, fluctuating and treatable conditions – such as mild to moderate mental health issues or some musculoskeletal problems – the system would apply a clear default assumption: that individuals can and should work. This principle would operate consistently across the system, from GP certification through to DWP assessments and tribunals. Long-term cash support through Universal Credit health payments or PIP would no longer be automatic in these cases, unless claimants can demonstrate clear and sustained functional limitation that prevents work

READ MORE: ‘We need to talk about the triple lock’

For those no longer eligible for health and disability benefits, this would be matched by a twin-track offer: access to treatment, including mental health care and physiotherapy, alongside targeted employment support – local programmes, job matching, skills and childcare. These would be funded through system savings.

The “emergency handbrake” is designed to be implemented quickly, using existing powers, to slow the flow of new claims while longer-term reforms are developed. And, as new polling conducted by YouGov for TBI reveals for the first time, there is clear public backing for reform. 

The political case for reform 

The numbers are striking. Some 62% of people say the welfare system is too easy to access and prone to misuse – a view that holds in all but five constituencies across the country. 

Among groups typically more sympathetic to the welfare system, concern is still widespread. Even current Labour voters are more likely to say the system is “too easy” than “too strict”. Among those who backed Labour in 2024 but now say they would vote Reform or Conservative, that figure rises to 69%. Nor is this limited to switchers: those who supported Labour in 2024 but now say they would not vote, or are undecided, take a similar view. The public has reached a clear judgement that the system is no longer credible in its current form.

The government can learn from the political failure of past reforms

The emergency handbrake avoids the pitfalls that doomed earlier reform efforts. Last summer’s proposals were widely seen as technocratic, arbitrary and harsh. They reduced complex lived experience to crude tests and created the impression that the government was more interested in saving money through a ‘budget for benefits’ than in ensuring people get the support that is genuinely right for them. 

Become a friend of LabourList and join our community. Our friends support our vital non-factional work and get access to exclusive content and events. 

What is being proposed has a clearer and more defensible logic: conditions that are mild, treatable and non-work-limiting should not automatically qualify for cash support. Those classified as non-work-limiting would be defined on the basis of robust evidence, not arbitrary judgement. This is not about withdrawing support, but redirecting it – towards treatment, recovery and a return to independence.

The emergency handbrake turns a political risk into an opportunity 

Welfare reform is not an area where any one party has established clear ownership, a view reflected in our polling. That vacuum won’t last forever. For Labour, that is not a consolation – it is an opportunity. Welfare reform is not an end in itself – it is how Labour protects investment in the things it was elected to rebuild: the NHS, schools, and national security.

The Secretary of State is right to think long-term. But the bill is rising today. An emergency handbrake is needed while that system takes shape. 

Reducing welfare spending involves real trade-offs. It will not be easy. But if the decision is that spending must come down – as public opinion, political debate and fiscal reality all suggest – these reforms offer a viable way to do it. 

Subscribe here to our daily newsletter roundup of Labour news, analysis and comment– and follow us on TikTok, Bluesky, WhatsApp, X and Facebook. You can also write to our editor to share your thoughts on our stories and share your own. The best letters are published every Sunday.