We need to get our welfare system back on track – and review the triple lock
Former health secretary Alan Milburn (right) and Work and Pensions Secretary Pat McFadden (centre) ahead of the launch of the Milburn review into Neets, December 2025
4 min read
Andy Burnham is right – a few decades ago, we took a wrong turn.
After WWII, Britain made a deal with itself: people should be able to live a decent life with a decent standard of living. They should be able to provide for their families and contribute back. The welfare state would look after you when you need it, helping through gaps in employment.
Margaret Thatcher came along and demolished all that. She shifted the economy away from industry and decently paid jobs in local towns, towards financial services in London and the Southeast. And what happened? Spending on unemployment benefit shot up to historic highs when the Tories were in power in the 1980s and 1990s. Now a larger chunk of the welfare bill comes from health and disability benefits.
I think people want to get back to something like that old deal, because right now things aren’t working. More than one in five British adults are not working and not looking – higher than in other countries. The figures for young people are particularly bad. It shouldn’t be this way.
But we can’t fix it just by cutting. We need to begin with work. The whole idea of the deal we made was that there would be a job for everyone who needed it. We need to find the 21st-century way to the same goal. Good work isn't just a wage – it’s how you look your neighbour in the eye. The political right gutted the industries that gave working towns their pride and never replaced them. If we're serious, we must build the economy back around real skills, local firms, and workers who own a stake in the place they work.
But we also need to fix the benefit system.
It’s not fair on the people whose money we take in taxes, and it's not fair on people who can’t escape from the system – stuck forever on benefits because they can’t get into a decent job. And an expensive welfare budget means that we can’t pay for other things we desperately need right now. Andy Burnham’s doing a great job so far, but he must know that he will be judged at the next election on a handful of issues: immigration, defence, and welfare reform.
Right now, the whole welfare row is stuck between the “cut it" side and the “protect it” side. Neither side is asking the question that really matters: does it work? Does it get people into decent jobs, or does it warehouse them out of sight? A welfare system that measures success by getting people into good work is neither left-wing nor right-wing. It's common sense.
We never have a proper debate around welfare reform in the round. Rather than setting out what we want the system to achieve, it becomes reactive and politicised in the worst sense. Could there be a way where we build political consensus? I would recommend establishing a parliamentary commission, along the lines of the Parliamentary Commission on Banking Standards in 2013, to collect evidence, review future challenges, and ensure that different parts of the political spectrum can all have a stake in the conversation.
A government in the not-too-distant future will have to review the triple lock on pensions
Not that we should be kicking the can down the road. There are things that can and should be addressed now – here are three.
First, we need to act quickly for young people not in education and employment, taking our steer from the soon-to-be-published Milburn review.
Second, despite recent reforms, our statutory sick pay system remains weak and sees people who could stay in work disappear into the benefits system.
Third, a government in the not-too-distant future will have to review the triple lock on pensions, and consider making the triple lock aspect of pensions means-tested – remembering that pensioner benefits cost over £177bn, compared to around £145bn for working age/family benefits, and £77bn on health-related benefits like PIP (some of which will also go to pension age claimants).
I don't think most people in this country want a bigger benefits cheque. I think they do want people to have jobs worth doing, a street worth living on, and a bit of respect – and a state that can step in to help when necessary.
That's not nostalgia. That's basic human dignity, delivered through common sense.
David Smith is the Labour MP for North Northumberland
