Unemployment Insurance - It looks likely it's going to implemented?

This is the latest news re Unemployment Insurance from the Benefits and Work site which was posted on their site today.

McFadden refuses to rule-out PIP cuts or rule-in WCA abolition

 Published: 24 November 2025

Secretary of state for work and pensions Pat McFadden refused to rule-out personal independence payment (PIP) cuts or rule-in the abolition of the work capability assessment (WCA), in wide ranging discussions with the Commons Work and Pensions committee (WPC) last week.

PIP

In relation to PIP, the WPC pointed out [Q118] that, since McFadden took over, the Timms’ review terms of reference have been changed to say that spending must remain within the Office for Budget Responsibility’s forecast.  As a result:

“There is a risk that those who have engaged with this process may fear that they are aiding the axeman in respect of PIP. What words of reassurance would you give to them?”

It turned out McFadden had no reassurance to give.

When asked [Q119] why the DWP continue to claim that the Timms review is being co-produced with disabled people, when “the Social Security Advisory Committee advised against using the term”, McFadden had to admit “in a spirit of candour with the Committee, I say that in the end, the Government have to make the decisions on policy, financial resources and so on.”

And when asked [Q120] point blank:  “Can you rule out future cuts?”, McFadden replied:

“I am not ruling anything out. I have only been in the job for three months, and if I start ruling things out it will just close doors in the future, so I am not ruling anything out.”

WCA

In relation to the WCA McFadden was asked [Q115]:

“In the Green Paper, the Government said they would publish a White Paper in the autumn on the abolition of the work capability assessment. Reports now seem to suggest that that has been cancelled. The WCA is a fundamental and crucial part of the whole system, so is that correct? Why the change and how are we going to move forward if that is not the case?”

McFadden could have simply responded with something along the lines of “We will be bringing forward separate legislation at a future date to deal with the abolition of the WCA.”

Instead, he obfuscated: 

“There were a number of changes in July, as the Committee is well aware. It meant we had to re-look at how we were taking these things forward. The Committee will be aware of the establishment of the Timms review. We may come on to that, but he will consider the whole question of PIP, with the other reviewers. There are some elements of the Green Paper that are now being looked at in a different way.”

Whilst McFadden’s response certainly doesn’t say the idea of abolishing the WCA has been ditched, it does suggest that it is no longer the certainty that it was on publication of the green paper.

Unemployment insurance

McFadden’s wariness in relation to the WCA was certainly not matched when he came to talk about changes to contribution-based benefits, where he explained [Q127]: 

“. . . I am enthusiastic about the idea of recreating more of a contributory unemployment insurance element, non-means-tested, based on your contributions as part of the system. I think it is a good idea. It is an idea that we hope to take forward next year. It is pretty simple: for a limited period of time, people with a good national insurance contribution record will be entitled to such a benefit.”

Under-22s

Nor did McFadden have any problem about admitting that Labour has not yet made up its mind about whether to prevent claimants under the age of 22 from accessing the health element of universal credit, another idea consulted on in the green paper [Q130]:

“We have not made a decision on that—not to repeat earlier answers—but the whole issue of young people, sickness, unemployment and work is within the terms of what I have asked Alan Milburn to look at in the next few months. It is in there and I do not want to make a decision on it until we have looked at things in the round.”

Mired in uncertainty

The impression McFadden gave, though certainly not intentionally, is of a department mired in confusion and uncertainty following the backbench revolt on PIP cuts earlier this year.

The minister is pretty certain they will go ahead with the introduction of unemployment insurance, but everything else seems to be no more than a “maybe” at the moment.

And, given the increasing likelihood of there being a new prime minister in place next year - and possibly a whole new team running the DWP – that’s probably wise.

You can download the transcript of Work and Pensions Committee Oral evidence: The work of the Department for Work and Pensions, HC 344