New Work and Pensions Secretary Open to Reforming Universal Credit

The new Work and Pensions Secretary, Pat McFadden, has indicated that he is open to tightening eligibility rules for Universal Credit. In a recent interview with the BBC, McFadden stated that welfare reform is an ongoing process, emphasizing the need for a system that better supports individuals seeking employment.

During his address at the CyberUK conference in Manchester on May 7, 2025, McFadden was asked about potential changes to health-related Universal Credit payments for claimants under the age of 22. He responded, “I’m not ruling anything out. Welfare reform is really important.” McFadden noted that the current welfare system is “unhealthy” and contributes to rising benefit costs due to insufficient support for those capable of work.

His remarks follow the government’s recent decision to reverse proposed reforms to Personal Independence Payments (PIP) and related health benefits within Universal Credit. This review was initiated by Stephen Timms, the disability minister, after the government faced backlash over its earlier proposals. Despite this, McFadden acknowledged the possibility of further adjustments before the review results are expected in a year.

“Welfare reform is happening all the time. Anyone who examines the current system shouldn’t conclude that the thing to do is to circle the wagons around it,” he asserted. This statement suggests a willingness to consider significant changes in response to ongoing challenges within the welfare system.

McFadden’s recent appointment to lead a new “super ministry” has generated speculation regarding a renewed push for welfare reform by the Labour Party. This comes after Sir Keir Starmer, the party leader, had to withdraw proposed cuts earlier this year amid dissent from backbenchers.

In a call with staff from the Department for Work and Pensions, McFadden highlighted the importance of equipping young people with necessary skills to prevent prolonged reliance on benefits. He described this focus as an “early area of priority” and emphasized the need for the department to confront the growing number of young people who are not engaged in education, employment, or training.

“I know that a lot of you are engaged in helping people onto skills courses and helping people onto training courses, but I’m hoping that with the change in the department’s responsibilities, we can really emphasise that more and give ourselves the ability to bring these things together in a new and good way,” he stated.

Last week, long-term government borrowing costs surged to levels not seen since 1998, raising concerns about the government’s capacity to maintain control over public finances amidst a global bond sell-off. Nevertheless, yields on 30-year government bonds, commonly referred to as “gilts,” have since returned to levels seen last month, providing some relief in the financial markets.

As discussions surrounding welfare reform continue, McFadden’s statements suggest a proactive approach towards addressing the challenges within the welfare system, aiming for a balance that supports both individuals and the economy.