People out of work with mental health issues, such as anxiety, face losing their benefits under major reforms to the welfare system, ministers have signalled.
The Government has spelled out that it will attempt another significant overhaul of the benefits system as it seeks to bring down the ballooning cost of the welfare bill.
It comes after Labour faced criticism for increasing benefits spending by £9.3bn in the Budget, while imposing a “stealth tax” on workers by freezing income tax thresholds until 2031.
Work and Pensions Secretary Pat McFadden on Sunday gave his clearest signal to date that Labour will look to carry out further reforms to the welfare system next year when a string of government-led reviews are published.
In particular, officials will be looking at the rise in people claiming benefits for mental health issues, with the Government announcing a review into the prevalence and diagnosis of mental health last week.
McFadden suggested on Sunday that people should not be receiving benefits for certain mental health conditions.
When asked whether people suffering with anxiety should be signed off work, he told LBC: “I think we can have a better response to anxiety than just giving people benefits.”
Speaking to the BBC’s Laura Kuenssberg, McFadden went even further, raising doubts as to whether people should be off work with mental health conditions and questioning whether the Government should be responding to the rise in mental health with extra benefit payments.
“The question I’m asking is, whatever lies behind the increased reporting, what should the policy response be from government? And candidly, I don’t believe it should be an offer of benefits where you’re written off, signed off and we never speak to you again, because the long-term scarring effects of that on a young person are really serious,” he said.
According to the Government, the number of 16 to 34 year olds signed off sick from work for mental health reasons has rocketed 76 per cent since 2019, prompting Health Secretary Wes Streeting to commission a review into whether mental health conditions are being overdiagnosed. The review is due to report back in the summer.
It will coincide with a separate review carried out by former health secretary Sir Alan Milburn, who is looking into the reasons behind the increase in young people not in education, employment or training (Neets).
And the disabilities minister Stephen Timms is also due to publish the findings of his own review into personal independence payments (Pip) next autumn.
McFadden announced new measures on Sunday that would mean young people lose out on benefits if they refuse a taxpayer-funded job after 18 months without work.
But ministers are expected to come back with a raft of new reforms next year in order to address the number of people out of work and bring down the soaring welfare bill.
The plans risk sparking a fresh backlash from backbench MPs, who forced the Government into an embarrassing u-turn in July, which ended up costing the exchequer around £6bn.
Asked whether he would rule out having another attempt at limiting the levels of some benefits, McFadden replied: “No, I don’t rule things out.”
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Cabinet ministers are privately more optimistic that they will be able to bring MPs with them when it comes to reforming the welfare system, acknowledging that the Government failed to listen to concerns last time.
And in a sign of opposition to future reforms if ministers get it wrong, Labour backbencher Neil Duncan Jordan told The i Paper: “There’s little doubt that since the pandemic there has been a rise of mental health issues amongst young people. As a society we need to understand this and find the right way of supporting them to reach their potential. Talk of punitive measures therefore starts from the wrong place. Let’s understand the what and why before we begin blaming and talking of cuts.”
The Department for Work and Pensions has been contacted for comment.
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