Kemi Badenoch: Why only the Conservatives have the guts to fix the welfare system

The below is the full transcript of Kemi Badenoch’s speech at the Centre for Social Justice:

We are becoming a welfare state, with an economy attached.

28 million people in Britain are now working to pay the wages and benefits of 28 million others. The rider is as big as the horse.

This isn’t just about welfare, it’s about politics too. 

We have a Labour Government, beholden to their left-wing MPs, who choose not to fix this problem. 

And a Reform party, that cannot.

This is a ticking time bomb – and with the exception of the Conservatives, the political class don’t see it or refuse to acknowledge it. In fact a lot of them want to make it worse!

If we don’t solve this problem, our economy will collapse.

A million young people are currently not in education, employment or training. 

And we are on course to spend one in every four pounds of income tax on sickness benefits alone.

What began as a safety net for the most vulnerable, has morphed into something completely different.

The system is unsustainable and this threatens all the good it was designed to do.

Our record

Of course, the obvious question is: “This is your system. How can you criticise what you’ve run for 14 years?”

It’s a fair question.

But the truth is, the problems in our welfare system now are not the ones we inherited.

If you cast your mind back to 2010, we took over a benefits system that was a dysfunctional mess, of overlapping entitlements handed out by different parts of the state. It very often meant people were worse off in work.

Unemployment was at 8 per cent. There were queues outside Jobcentres.

People up and down the country got up and went to work, while next door their neighbours’ curtains were drawn until noon.

It was against this backdrop that Iain Duncan-Smith set up the Centre for Social Justice back in 2004.

People in this room will remember Breakdown Britain – the forensic diagnosis of how welfare dependency was hollowing out families, communities, and lives.

This hard work, done while we were in opposition, meant that when we took office we could deliver the biggest reform of our welfare system in its history. 

Universal Credit was a massively ambitious plan, to simplify benefits. It made sure that work always paid. 

We brought the welfare bill down year after year, and got people into work. 

800 jobs were created for every day that we were in office.

And that matters. Because work gives people purpose, stability, connection.

It changes the lives of entire families. When Conservatives left office, we had halved unemployment. Before Covid we had the lowest number of workless households since records began.

 A child that grows up in a workless household is likely to under-achieve at school. Worklessness and dependency are passed down through families. 

The problem is that as we came out of the pandemic, we started to see a new phenomenon.

We now live in a country where one in four people self-report as disabled. 

People are receiving disability benefits for having tennis elbow.

I know some may disagree with me – but I do not believe that one in four of us can be considered disabled without that term losing all meaning.

In this new age of diagnoses and self-certification, our sickness benefits system cannot cope.

And we are now spending more on sickness benefits than we do on defence.

We brought in the household benefit cap, to stop worklessness paying more than wages. 

But, new research from the CSJ has found that under Labour, people receiving sickness benefits could now get £2,500 more a year than a minimum wage worker. 

This is not just fundamentally unfair – it is a fiscal disaster waiting to happen.

Labour’s failure

It should have been clear to anyone seeing this, that it isn’t sustainable.

But the reason Labour have failed so badly on this over the last month, is that they didn’t see these problems in opposition. 

They thought that if Labour ran the country all of Britain’s problems would just go away, because they think of themselves as nice people.

But sanctimony is not a substitute for policy. So, when they came into office they didn’t have their own version of Breakdown Britain. They had no plan and were completely unprepared for government.

They didn’t have a Universal Credit 2.0.

They didn’t tell their backbenchers that they needed to cut welfare. Labour don’t know what they believe. That will be the epitaph of this Government.

It was only when Rachel Reeves came shaking her bucket outside the DWP, asking for some quick savings to plug the hole in her figures, that in a rush they tried to tinker with a system that needs wholesale reform. 

Even if their original Bill had passed, it wouldn’t have fundamentally fixed anything – because it was a sticking plaster solution. 

Now, they can’t fix it in this Parliament.

So, for the next four years we are stuck.

With 3,000 people a day signing on to out-of-work sickness benefits. 

And with people getting taxpayer-funded cars for having constipation.

The bill will go up to £100 billion on their watch.

And that’s just sickness benefits.

Their economic mismanagement means that every day they are in office, jobs are being lost. And job losses mean more people going onto welfare, and fewer people coming off.

No doubt emboldened by their success in forcing Starmer to u-turn last week, Labour’s backbench MPs will now be eyeing up even more concessions. 

We know that there are more tax rises coming in the Autumn – that’s now been all but confirmed by the Chancellor.

But what Labour haven’t told you, is that this doom loop they have set up will mean taxes will keep having to go up. 

Wealth creators are fleeing the country. People have stopped hiring because of Labour’s Jobs Tax. 

Fewer and fewer people will have to support more and more. That’s the tax spiral.

None of the other parties seem to acknowledge this.

Last week we saw left-wing Labour MPs, Lib Dems, SNP, Independents, Greens and, revealingly, Reform MPs all vote for higher welfare spending, and an even more generous benefits system. 

Reform like to pose as a Right Wing party, but they don’t seem to understand that asking the taxpayer to fork out £100 billion a year on health and disability benefits isn’t just completely unaffordable and unjustifiable – it’s immoral. 

And the Prime Minister has already signalled he’s open to removing the two-child benefit cap. 

In fact, right at this moment there are probably Labour MPs behind closed doors drawing up plans to force his hand.   

And they’ll find allies in Reform. Nigel Farage has committed to remove the cap, and is warning that he’s “not finished yet” on benefits giveaways. 

Make no mistake, he is Jeremy Corbyn with a pint and a cigarette. On welfare he shows his true colours – promising unaffordable giveaways with no plan to fix the system.

I want to be clear why the Conservative government brought in the two-child benefit cap.

It’s because we believe that people on benefits should have to make the same decisions on having children as everyone else.

But Labour and Reform MPs don’t even understand what the cap does and they don’t care that lifting it would create another £3 billion black hole in our finances.  

It’s not that we don’t want people to have families. We do.

But the way to achieve that is to make sure people can afford to have families because they’re in good jobs.

Not by increasing the tax burden on working people.

So next week we’re going to put this to a vote in the House of Commons.

And you’ll see, that the Conservatives are now the only party committed to serious welfare reform.

We are the only party that is prepared to tell the truth and take the tough decisions to get spending under control. That’s the way to bring real change. 

How you can fix it

Getting the welfare bill down is not an impossible task. But it requires conviction and the courage to make difficult choices.

We have to start from our principles.

First, who needs and deserves our support? 

There will always be some people who need help from the state. 

People who have a really challenging disability. 

People who have worked and paid into the system for years, but who lose their job suddenly through no fault of their own.

But we can’t afford to be spending £1 billion a month on benefits for foreign nationals.

It is not unreasonable to expect someone to have paid in and become a British citizen before they unlock access to sickness benefits.

This was a plan we put forward yesterday, and that Labour voted down.

We also clearly cannot afford to support one in four people who now classify themselves as disabled. 

We are going to have to draw a line in the sand about which conditions the state gives out support for.

Food intolerances are a medical fact, but they’re not something we should be handing out new cars for. That is not a joke. This actually happens.

And anxiety and mild depression are real conditions, but that doesn’t mean those suffering should be signed off work courtesy of the taxpayer.

The Centre for Social Justice have done some brilliant modelling, showing that if you restricted benefits to those with more severe mental health conditions, you could save up to £9 billion.

Think how much good even a fraction of that could do when reinvested into mental health treatment and research, instead of funding people to sit at home.

Second, how do you accurately identify those people who you’ve decided qualify for support?

Clearly, our current system of assessment isn’t working.

Approval rates have soared, and we now have online ‘sickfluencers’ selling people scripts to maximise their scores on an assessment!

We need to build in proper medical evidence to the system.

And go back to face-to-face assessments which never recovered after covid.

The Motability Scheme is a perfect example of what’s going wrong with the current system.

Initially set up to help disabled people get around.

90 per cent of its cars now have no adaptations whatsoever.

People are qualifying with conditions like drug misuse, ADHD and obesity.

The assessment system surely can’t have been designed with that intention.

And we can’t allow it to continue for a moment longer.

And third, we need to think about what support actually helps people.

Because at its best, a welfare system acts like a trampoline: it cushions your fall and propels you back onto your feet.

It should not act like a giant net that engulfs you and makes it almost impossible to climb out. 

Up and down the country, people with really challenging health conditions do extraordinary things.

They go to work. Raise families. Set up businesses.

We need to ask: Why are some people able to do that but not others ?

What skills and support do they need? 

Giving someone, for example, eight weeks of retraining and physiotherapy, and getting them back into work is a better solution for everyone than allowing them to languish on benefits.

And doing that before they fall out of the workforce is even better.

We live in a totally different world than the one we did 30 years ago. 

Even people who are housebound can now contribute and make use of their talent.

We should be aiming for everybody to support themselves as far as they are able, while providing support for those who cannot.

The arguments you’ll be done

To do this, we will have to win arguments.

Arguments that too many in politics have forgotten how to make.

Like a life of work being better than one dependent on the state. 

Not just better for society, although we believe that too…

But actually better for the soul. That it feels better to contribute and enjoy the freedom that comes with paying your own way.

Too many young people are growing up not knowing that. 

They think that a life on benefits is an alternative to working.

They think that isolating themselves at home is ok because starting a job feels daunting.

We have to show them a better way.

We need to win the argument that an ever more generous welfare budget isn’t kind, it’s cruel.

It locks people out of opportunity. It puts support for those who genuinely need it at risk.

Every other party thinks the public want more welfare. 

But I think our people have more common sense than that.

I think they can see the damage it’s doing to our country. 

Britain needs politicians who will tell the truth, about the challenges facing the country – that’s the only way to get the real change we need.

We need to win the argument, that personal responsibility matters.

That if you can support yourself, you should.

That if you want a better phone, or a new car, or a bigger house – you need to earn that. You should not expect someone else working hard to pay for yours as well as theirs.

And we need to bring back the idea of saving for a rainy day.

If you think the state is going to bail you out every time, why would you make sacrifices? Why would you put money away – especially if Rachel Reeves is coming for your savings, your pension, your family home?

And finally, we need to win the argument that the state shouldn’t be the first place you go for support.

Because the state can never do better than what families and communities should do.

It’s no wonder, that our welfare bill is rising in an age when family structures are fraying, and the number of people volunteering has fallen off a cliff.

We should be backing the makers – rewarding the people getting up every morning, working hard to build our country.

This is about getting the welfare bill down.

But it’s also about what we believe the good life looks like.

Freedom, security, optimism.

Only the Conservatives will stand up for these values — and unlock the talent, dignity, and purpose of millions being left behind.

You can watch Badenoch’s CSJ speech here

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