Department for Work and Pensions (DWP) boss Liz Kendall met with the insurance industry as part of the Labour Party government’s flagship Child Poverty Taskforce just a month before one infamous insurance company celebrated opportunities for “collaboration between government and group risk insurance providers”.
The insurance corporation in question made the comments over the DWP’s major package of welfare ‘reforms’ in the government’s Pathways to Work green paper. Of course, this publication included the department’s devastating plans to cut disability benefits – that its own impact assessment conservatively estimated would plunge 50,000 children into poverty.
Child Poverty Taskforce: a cynical distraction from real DWP-led solutions
Fresh from the election in July 2024, the Labour Party government established its key ministerial Child Poverty Taskforce. Joint-led by DWP secretary Kendall and education secretary Bridget Phillipson, it forms Labour’s main answer to spiralling child poverty rates.
The taskforce’s core focus is to develop Labour’s ‘child poverty strategy’. It set out how it would meet a range of stakeholders and experts from across the public and private sector.
Its launch came just a week before Starmer suspended seven of his own MPs for rebelling against the party whip over the two child benefit cap.
The government has repeatedly cynically held up the taskforce as a ward against calls to scrap the two child limit on benefits. Yet, according to the Child Poverty Action Group (CPAG) the single move alone could immediately lift 400,000 children out of poverty. A further 950,000 children would also be living in less deep poverty thanks to the change.
In May, the government delayed the publication of its much-vaunted child poverty strategy. It told the BBC that the taskforce would now be publishing this in time for the budget in autumn. Yet, this is all while the disgusting policy continues to push more children into abject poverty. Just since Labour entered government, the two-child limit on benefits has done so to 37,000 more children.
Scrapping the two-child benefit limit?
Early details on what the strategy might contain from an October policy paper omitted any mention of the DWP two child benefit limit. Since then, media reports have floated the possibility that Starmer and co may well be reconsidering their position on this. Crucially, this could be with a view to finally scrapping it.
However, information on Labour’s plans for the cap has arguably been a constant merry-go-round of Cabinet minister contradictory statements. And alarmingly, as the Canary’s Steve Topple pinpointed in May, comments transport secretary Heidi Alexander made suggested this could involve a two tier system. Specifically, the DWP would determine which parents are deserving of support.
Of course, this two-tier eugenicist approach would also not be out of step with recent government plans. Its latest calculated move to push its callous welfare bill through parliament entails a similarly divisive . It will involve carving up Personal Independence Payment (PIP) and the health element of Universal Credit into two groups. Future claimants will operate under its new repressive, restrictive criteria. Meanwhile current claimants will continue – for the moment – under the current system.
Disgraceful DWP benefit cuts
Instead of scrapping the DWP two child limit, the short policy paper indicated that the government would centre much of its child poverty strategy around driving parents and care-givers into work.
In other words, without a shred of irony, its welfare cuts will likely form the basis of its plan to tackle child poverty.
This is also despite the findings of the department’s own impact analysis. It identified that the cuts will push 250,000 people, including 50,000 children, into poverty. And this is likely a huge underestimate anyway – since the figures relied on a flawed analysis. The Joseph Rowntree Foundation has estimated this would be closer to 400,000 people, including 100,000 children.
Of course, these estimates also applied to the government’s welfare plans prior to its last-minute changes. The new – arguably enormously unethical – so-called ‘concessions’ the government announced in response to the Labour MP rebellion inevitably alters these figures.
A new impact analysis states the bill will push 150,000 working age adults into poverty. Purportedly, it suggests the impact on children will be ‘negligible’. However, the analysis is once again based on flawed reasoning. Specifically, as the Canary highlighted in the original one, it took into account previous government ‘plans’ for the DWP Work Capability Assessment (WCA) – ones it had never implemented. Therefore, it’s not actually estimating these figures on the current welfare landscape – so it’s almost certainly a major underestimate.
Undoubtedly, the impact will still be far-reaching and devastating. Nonprofit Trussell has estimated the bill will still leave 430,000 future PIP claimants £4,300 worse off a year on average. On top of this, 700,000 future UC LCWRA claimants will lose an average of £3,000 a year.
Obviously, it’s a gap in the social security safety net the insurance industry will be only too happy to exploit. And lo and behold, one infamous insurance vulture has already been circling the welfare cuts announcements.
Association of British Insurers gets a seat at the taskforce table
On 25 February, DWP secretary Kendall and department minister Alison McGovern hosted a roundtable meeting of the Child Poverty Taskforce.
Stakeholders present at the meeting included the Association of British Insurers (ABI), the Institute for Public Policy Research (IPPR), Iain Duncan-Smith’s brainchild the Centre for Social Justice (CSJ), and the Local Government Association (LGA). Also present at the roundtable were numerous other organisations including Fair4All Finance, Citizens Advice, Black Equity Organisation, Nest Insight, Step Change, Fair By Design, and Changing Realities. The Financial Times and the University of York also participated in the taskforce meeting.
ABI is the leading industry insurance body. It counts some of the largest insurance companies among its board. For instance, it includes Unum, Aviva, Zurich, Swiss Re, and Allianz, among others.
The sparse details the DWP provided on its ministerial meeting register disclose only that the focus of the roundtable meeting revolved around discussions on:
the critical role of financial resilience and income maximisation in alleviating the effects of child poverty
It reflected passages from the policy paper. This also laid out “increasing incomes” and “increasing financial resiliency” as two key areas of the upcoming strategy. The first encompassed its back-to-work agenda. For the second, this was all about “problem debt” and “low savings levels”.
The ABI’s presence at the meeting makes it clear the Labour government envisions a leading role for insurance companies in addressing all this. And to be sure, it’s a profit-making opportunity the insurance industry is evidently not about to pass up.
Notably, the language is strikingly similar to the corporate chatter of recent months from certain industry bigwigs.
Enter: Unum
In March, insurance major Unum’s CEO Mark Till spoke to industry publication Cover Magazine. It was over the role of the insurance sector (our emphasis):
in increasing the level of financial resiliency and activity through improving public health.
Crucially, this was in the context of the government’s freshly announced DWP disability benefit cuts. Till told Cover Magazine that vocational rehabilitation was a key focus for the insurance giant. Obviously, the company has a stake in championing this in order to evade paying out for claims.
It also must have been entirely by coincidence that Till joined ABI’s board in October 2024. Specifically, this was just before the government laid down its early child poverty strategy.
In another article following Kendall’s green paper, Unum head of product proposition Clare Lusted remarked on chancellor Rachel Reeve’s reaffirmation of investment in DWP work programmes.
She said:
With the announced cuts, it’s critical employers have access to the tools and financial resources needed to support their employees when they need it the most, and to keep them healthy and productive.
Lusted continued that:
Employers with comprehensive benefit packages can play a crucial role in preventing ill-health, helping to keep people in work and rehabilitating those who have fallen out of work to help get them back in a successful and sustainable fashion. This not only enhances business resilience and productivity but also contributes to the wellbeing of society and the broader economy.
Separately in March, Lusted also commented on the DWP’s publication of former John Lewis chairman Charlie Mayfield’s discovery report for its ‘Keep Britain Working’ review. Referencing the freshly published green paper in tandem, Lusted said that:
The path to an 80 per cent employment rate demands collaboration between the government and group risk insurance providers. Unum’s Group Income Protection rehabilitation service, with its 97 per cent success rate, proves that prevention and early intervention change lives, benefit businesses and have a positive impact on wider society.
And Lusted welcomed Unum’s chance to share its “insights, expertise and experience” for the next part of the review.
In short, Unum was ostensibly celebrating the welfare cuts amid Labour’s coercive work rhetoric. Of course, it was undoubtedly all for the probable boon they could signal for its income protection insurance (IPI) business.
Insurance industry at it again over DWP welfare cuts
ABI’s involvement in the Child Poverty Taskforce is also not the only indication the industry has likely been influencing recent DWP welfare policy-making.
Its 2024 annual report stated how:
We’ve continued to work closely with senior UK officials and policy leads in the Treasury, DWP and DHSC and were delighted to welcome Liz Kendall, now Secretary of State for Work and Pensions, at our Annual Conference to discuss the role of our sector in supporting people to stay in work.
We will be continuing to engage with developments in workforce health via the passage of the Employment Rights Bill, the Making Work Pay: Strengthening Statutory Sick Pay consultation, and the Get Britain Working white paper.
So DWP boss Kendall, then a shadow secretary, was a keynote speaker at its 2024 conference. Not only that, but the industry body effectively confirmed it has maintained close ties to the Labour government. What’s more, it openly admitted how it has fed into discussions on the sister paper to the government’s welfare reforms.
Of course, we’ve been here before. It wouldn’t be the first time insurance companies have sought to shape government welfare reforms.
Unum was at the forefront of influencing cruel reforms previous governments designed to restrict welfare. It funded research which paved the way for the Gordon Brown government’s controversial introduction of the Work Capability Assessment (WCA) in 2008. Notably, it financed Tony Blair’s chief medical adviser Mansel Aylward and orthopaedic surgeon Gordon Waddell to develop the controversial biopsychosocial (BPS) model. This essentially facilitated the DWP denying chronically ill and disabled people access to welfare benefits. Unum later bragged about its role in Incapacity Benefit (IB) reforms that resulted in multiple disabled claimants deaths.
And as the Disability News Service (DNS) noted at the time:
tougher welfare rules – including replacing incapacity benefit with employment and support allowance (ESA) – are likely to persuade more people to take out IPI, boosting the company’s profits.
Nothing new from corporate-captured Labour
So once again, it’s in this neoliberal New Labour tradition that the current brutal cuts to DWP welfare emerge. Of course, it seems almost inconceivable that Starmer’s corporate-captured Labour hadn’t been hitching its benefit ‘reforms’ to the vested business bandwagon all along. But now, here are the receipts.
When it comes down to it, Labour’s welfare cuts have little to do with helping chronically ill and disabled people. Yet, if the industry murmurings and its seats at the table are anything to go by, they’ve had everything to do with pushing them into the hands of profiteering insurance companies.
Needless to say, it’s no child poverty strategy to strip hundreds of thousands of poor, chronically ill, and disabled people of their benefits. However, it’s sure a winning plan for the predatory insurance sector to cash in on.
Feature image via Flickr/the Department for Education, cropped and resized 1200 by 800
This post was originally published on Canary.