King’s Speech 2023: Welfare

1. Welfare benefits

In March 2023, the government published a health and disability white paper which contained a range of policies designed to support the long-term sick and disabled into work.^[1]

One of the main policy announcements in the white paper was the government’s intention to reform disability benefits by abolishing the work capability assessment (WCA), which provides access to additional health-related payments in the employment and support allowance and universal credit. However, the white paper stated that this would not be legislated for until the next parliament (after the next general election). The government has since launched a consultation on reforms to the WCA which runs until 30 October 2023.^[2] The consultation confirmed that the abolition of the WCA would not be included in the 2023 King’s Speech.

Another issue receiving attention, but which would not require any reference in the King’s Speech, is whether benefits will be increased in line with inflation. Some welfare benefits are index-linked, meaning that they rise annually in line with the consumer prices index (CPI).^[3] The uprating that applies from April each year is set by the rate of inflation the previous September. In September 2023, CPI inflation was 6.7%.^[4]

In 2022, the government announced that benefits from April 2023 would increase by the full rate of inflation, which had been 10.1% in September 2022. Although CPI has been falling since that time, the September 2023 rate of 6.7% was the same as the August 2023 rate. This has prompted speculation that the government may not uprate benefits by the full amount from April 2024.^[5]

At the time of writing, the government had not committed to uprate benefits in line with inflation for 2024/25. In answer to a parliamentary written question on benefits uprating on 25 October 2023, the Department for Work and Pensions (DWP) minister, Guy Opperman, stated that the outcome of the annual review of benefits “will be announced in the autumn”.^[6]

The Resolution Foundation think tank has argued that uprating benefits by anything less than the September 2023 rate would be “a very bad idea indeed”.^[7] It said that doing so would reduce the income of nine million working-age households in the UK. It claimed that even if benefits were uprated by the full amount, they would “still only return to the real value they had on the eve of the [Covid] pandemic”.

2. Possible legislation relating to welfare and benefits

The following sections consider legislation that may be introduced in the 2023–24 session of parliament.

2.1 Reducing fraud and error in the benefits system

The government has said it will legislate to reduce fraud and error in the benefits system. In 2022, the DWP published ‘Fighting fraud in the welfare system’. The paper stated that prior to the coronavirus pandemic, fraud and error in the benefits system was “near a record low”. However, it said that the pandemic “saw a significant increase in fraud”, partly due to the length of time it allowed “easements to the benefits system in order to provide financial support to the self-employed”. It stated that in the financial year 2020/21 the combined loss to fraud and error was “£8.4bn or 3.9% of benefit expenditure”. This compared to £3.9bn or 2.1% in 2018/19.^[8]

The document stated that much of the legislation used by the DWP’s counter-fraud officers is “now decades old”. It said the government would introduce measures to improve access to data and enforcement:

Subject to parliamentary time, we will legislate to update their powers to boost access to data from third parties and carry out arrests and searches and seize evidence. This will enable them to act more quickly to identify, detect and disrupt fraud, particularly from organised criminal gangs and wider economic crime. We will also bring in a new civil financial penalty, so more fraudsters pay for their crimes.^[9]

In March 2023, the government reiterated its intention to legislate for the changes “when parliamentary time allows”.^[10]

2.2 Child maintenance enforcement

On 2 October 2023, the DWP announced a consultation on child maintenance liability orders to “speed up enforcement action”, and the removal of the application fee to the Child Maintenance Service (CMS) and other longer-term changes.^[11] The consultation runs until 24 November 2023.^[12]

Currently, if a parent fails to pay the child maintenance that they owe then the CMS can attempt to recover the money from the parent’s earnings or bank account. If these methods do not work the CMS can seek a legal order, known as a ‘liability order’, from a magistrates’ court that confirms the amount of child maintenance owed. Once a liability order has been issued the CMS can take various enforcement actions.

The consultation relates to the passing of the Child Support (Enforcement) Act 2023 and the Child Support (Domestic Abuse) Act 2023, both of which received royal assent in the summer of 2023. The government said that these acts provide the basis for the “CMS to act swiftly, progressing enforcement action faster”. The government said the consultation “lays the groundwork for new regulations that will accelerate tough sanctions on non-paying parents” by allowing the CMS to use powers provided for in the acts to create “administrative liability orders”, without having to go through the courts.

The government also said it would “legislate to ensure unearned income, such as savings, investment, dividend and property income, is taken into account automatically when the maintenance calculation is made”.

Read more

• House of Commons Library, ‘Child maintenance: Fees, enforcement and arrears (UK)’, 30 August 2023
• House of Lords Library, ‘Child Support (Enforcement) Bill’, 9 May 2023
• House of Lords Library, ‘Child Support Collection (Domestic Abuse) Bill’, 28 March 2023

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