The Labour Party government’s war on chronically ill and disabled people is only just getting started. After the Department for Work and Pensions (DWP) rammed through its brutal cuts to Universal Credit, and backlash forced it to shelve its plans to slash access to Personal Independence Payment (PIP), it has a suite of further vicious ‘reforms’ on the horizon.
Amid a wider programme of callous de facto cuts, the government has lined up plans to essentially do-away with new-style Employment and Support Allowance (ESA). Instead, it proposes to replace it with a time-limited sickness benefit. Alarmingly then, this could see the government stripping hundreds of thousands of chronically ill and disabled people of the non-means tested contributions-based benefit.
However, the plan for new-style ESA has also thrown a spotlight on the vested interests shaping welfare behind the scenes – namely, a notorious centrist Labour-affiliated think tank working in conjunction with a sector that could stand to gain from the reforms: the insurance industry.
DWP plans to do-away with new-style ESA
DWP boss Liz Kendall first introduced the plans for replacing new-style ESA in March. This was as part of the government’s flagship Pathways to Work Green Paper.
Simply put, the plan involves rolling new-style Jobseeker’s Allowance (JSA) and new-style ESA into one new contributory benefit. The DWP is titling this ‘Unemployment Insurance’.
Like currently the case with ESA and JSA, the benefit would require full National Insurance Contributions (NIC) in the most recent two tax years.
At present, JSA is also only for up to six months. In comparison, the new Unemployment Insurance has the possibility of extending to a year. The DWP is currently consulting on this. As a result, it has yet to set out the length of time a person will be entitled to it. The department also envisages bringing the benefit in line with ESA’s current higher – albeit still inadequate and below minimum wage – rate.
However, as with everything ‘positive’ this Labour government does, there’s obviously a catch. In this case, it is proposing to improve JSA at the expense of chronically ill and disabled people claiming new-style ESA.
Notably, it wants to get rid of the long-term entitlement to the contribution-based benefit. While it is maintaining the rates, under the new Unemployment Insurance, claimants will only be able to access a time-limited award. This is similar to what those in ESA’s work-related activity group do currently.
Unemployment Insurance: more cuts by any other name
In essence, the DWP is planning to scrap the Support Group, that is, the contribution-based benefit for those who are too sick to work.
It means there would no longer be a non-means-tested out-of-work benefit for some chronically ill and disabled people in the long-term. People who might otherwise have become ESA Support Group claimants may instead be able to apply for Universal Credit’s health element. This would be if their income and savings fall beneath its threshold. Of course, this will be at the slashed half-rate for new claimants the government has recently rammed through in its Universal Credit money bill.
Moreover, the DWP intends to mandate that anyone claiming Unemployment Insurance will also have to “participate in conversations” around employment. In other words, the DWP will force chronically ill and disabled people to talk to job coaches. It likely means it’ll condition the benefit on searching or preparing for work. This will be irrespective of whether a claimant can actually work – or it is safe for them to do so.
This particular proposal for Unemployment Insurance does feature in the DWP’s consultation – unlike the cuts to Universal Credit’s LCWRA. Despite this, the question concerning it makes it sound like the intention is to scrap it regardless. Crucially, the department has framed the question around *how* it should go about making the changes, not whether it should make them in the first place. So while it is consulting the public – this looks to be yet another tick-box exercise. There looks likely to be little in the way of meaningful consideration.
Enter: the Fabian Society
The Canary previously exposed that Labour’s cuts to Universal Credit were the brainchild of ‘progressive’ think tank the Resolution Foundation.
This time however, a certain longstanding centrist think tank appears to be behind the reform, albeit dressed up amid a package of more progressive-sounding policy ideas. The organisation in question? The Fabian Society, infamously at the centre of sabotaging Jeremy Corbyn’s leadership of the Labour Party.
Keir Starmer himself is a prominent Fabian. Moreover, the majority of the current government maintains membership or has been affiliated with it at one time. Tony Blair’s Labour government also previously ushered many Fabians into Cabinet positions. In short, the society has firmly embedded itself through centrist Labour politicians for a past-time.
So it should come as little surprise that scrapping new-style ESA was a machination of the Labour right-platforming think tank.
Specifically, the Fabian Society put the idea forward in a report it published in preparation for the General Election. Titled, In Time of Need: Building Employment Insurance For All, then shadow – and now government DWP minister – Alison McGovern fronted the launch event for the publication in March 2023.
Diverging proposals – but the same at their core
The report suggested that a new Labour government should replace JSA with Unemployment Insurance. It’s presumably where the government also got the name. Alongside this, it suggested a separate ‘Sickness Insurance’ to operate in tandem with it.
Like the DWP’s plans, these would be to replace new-style ESA and JSA.
First, it’s worth noting that there were a number of places the government’s approach diverged from the report. To start with, Labour has evidently merged these, rather than introduce two separate benefits.
The Fabian Society report also proposed the DWP should extend the entitlements to more employees and self-employed workers. By contrast, the government hasn’t set out a definitive timeline for doing this. However, it did make a cursory mention to it in its Green Paper.
Following this, the report suggested both Unemployment Insurance and Sickness Insurance should match the rate of statutory sick pay (SSP). Eventually, this would increase to 50% of a claimant’s previous earnings. However, it immediately tempered this with a convenient get-out caveat that:
In the current fiscal climate perhaps only the first [extending to self-employed] of these options can be considered without a matching source of revenue.
Giving the Labour government loopholes all along
Right from the start then, it was giving the government a loophole to take up only the least ambitious of its plans. And it was using bogus fiscal grounds to do so. It also stipulated the SSP uplift would be just for the first six months of Sickness Insurance.
Another was that the DWP should start treating the two as earned income for the purposes of Universal Credit. This would mean that instead of it offsetting like-for-like as JSA and ESA do now, the Universal Credit (55p to every £1) taper would come into effect. However, the government hasn’t adopted this within its plans to date for Unemployment Insurance.
So while the DWP hasn’t adopted this in its entirety – it’s clear it’s where the plan originated from. And indeed, it maintained its core most destructive feature: time-limiting the benefit.
Party of work rhetoric: here we go again
Predictably, the rhetoric for doing so is a mirror of the Fabian report’s.
Perhaps unsurprisingly, given the contribution-based benefits focus, it was straight from the ‘Party of the working people’ playbook. For one, the report leaned on the ideals of the 1942 Beveridge report, quoting from it that:
Benefit in return for contributions, rather than free allowances from the state, is what the people of Britain desire.
This was of course the Beveridge report that prompted the founding of the Welfare State. But this ableist outlook – which excluded chronically ill and disabled people unable to work, was a palpable feature of its ideology. And it’s evidently one hasn’t gone away. What’s clear is that Fabian members have carried this disablist dogma into the present day political arena. Notably, its report highlighted how in 2020, three-quarters of its citizens’ jury on social security:
agreed that people who had “paid into the system by making regulation national insurance contributions” should receive more in benefits than those who had not.
The Fabian report double downs with this, lamenting that:
Today those who pay national insurance and other taxes designed to fund social security often feel they receive little back, in what’s been called a ‘nothing for something’ system.
Meanwhile, Pathways to Work plays up this narrative – but in reverse – stating that:
The welfare system was founded upon the contributory principle – the idea of ‘something-for-something’.
As ever then, the rhetoric is about tying a person’s worth to their productivity inside the capitalist system. The implication that chronically ill and disabled people who can’t work have less value, and in turn, deserve less support is nothing short of eugenics in capitalist clothing. Incidentally, in the last century, the Fabian Society championed eugenics.
A veneer of social progressiveness: the DWP and Fabians in a nutshell
There’s also plenty of parallel guff about benefit generosity ‘disincentivising’ people returning to work. The Green Paper states in particular for instance that:
We believe this would make the contributory system simpler and significantly more pro-work by first removing the binary distinction between jobseekers and those considered unable to work (by removing the WCA) and second by removing the financial incentive to be considered unable to work (by paying at a flat rate).
And naturally, the Fabian report plays up this myth – using it to further justify the case for time-limiting support.
Overall, the Fabian Society report and the DWP’s Green Paper both wrap their proposals up in a veneer of social progressiveness. On the one hand, they put forward suggestions to improve welfare. Yet, with the other, they move to take it away – and ultimately dismantle existing support.
Both are presenting a binary choice. This would be between cutting disabled people’s support in order to uplift benefit rates as a whole, and keeping rates as they are. Obviously, it’s a false dichotomy. The DWP could – and should – raise everyone’s social security so the paltry support isn’t consigning so many to state-sanctioned poverty.
Insurance industry has its grimy fingerprints all over DWP reforms
So it’s apparent the Labour Party government took its cues from the Fabian Society with its plans to scrap new-style ESA.
And who looks to be behind the Fabian Society’s proposals for this? That would be former insurance industry titan, and current investment corporation Aberdeen Group.
Plastered across the think tank’s report is the logo for the company’s previous philanthropic research funding arm, abrdn Financial Fairness Trust.
Scotland-based investment company Aberdeen Group Plc owned the trust until it wrapped it up in July 2025. At the time, it had ultimate oversight over trustee appointments and the trust’s staff were directly under its payroll. It would also plant a direct Aberdeen employee on the board. In other words, it was heavily involved in the trust’s grant-making decisions.
Aberdeen – previously abrdn (and Standard Life Aberdeen before that) came about as a result of a merger in 2017 between Aberdeen Asset Management and Standard Life. In 2018, it sold its Standard Life brand to Phoenix Group. As such, it no longer retails insurance policies directly to the public. It does however still provide investment ‘solutions’ for insurance companies.
The Fabian publication incongruously declares how it was “kindly supported by” the trust:
as part of its mission to contribute towards strategic change which improves financial wellbeing in the UK.
Translation: it financed it. In 2023, the trust (formerly known as the Standard Life Foundation) gave the Fabian Society £90,780:
Towards research to develop a living standards action plan for implementation by government after the next General Election.
The Fabian Society’s 2022 report also lists the project with £65,000 funding from abrdn. As this was an 18-month project, it’s unclear if this was two separate grants, or if the £90,780 figure reflected the total funding by the project’s completion.
Overall though, it appears an investment company with a past in the insurance industry, and that maintains clients in the sector, used the Fabian Society as a vehicle for its soft lobbying.
Fabian Society report: a perpetually revolving door
And both the Fabian Society report and its insurance industry financier are awash in ties to the Labour right, and Starmer’s government.
To start with, the Fabian report’s original lead author Josh Abey stopped working on the project partway. This was to take up a series of roles in none other than Labour’s then shadow DWP secretary Jonathan Ashworth’s employ. The report briefly makes reference to this. Specifically, his LinkedIn shows that he started working as a senior policy researcher for Ashworth in July 2022. A year later, Abey then became a political advisor for Ashworth. Following this, during the election campaign between May and July 2024, Abey had a dual role as a research officer for Ashworth and the Labour Party.
From September 2024, (and after Ashworth lost the election), Abey took on a new policy officer position for the generally progressive Child Poverty Action Group (CPAG). Interestingly, Abey’s new role for CPAG coincided with the departure of (in June 2024) now DWP minister Torsten Bell. He had resigned his directorship of the charity ahead of the election. This was also alongside stepping down in his role as lead of the Resolution Foundation.
After Abey left his job at the Fabian Society for Ashworth’s office, then Fabian general secretary (August 2011 – October 2024) Andrew Harrop took up his mantle on the report. However, the revolving door didn’t stop there. Harrop then became the abrdn Financial Fairness Trust’s policy advisor from March 2025, until it closed up shop that July.
abrdn Financial Fairness Trust: awash with Labour connections
Unsurprisingly, this backscratching ecosystem extends into an ever more nebulous network when the trust is thrown in the mix.
For a start, former Labour chancellor of the exchequer Alistair Darling cropped up in conjunction with the trust. Darling was, as the Canary’s James Wright has put it, the:
architect of the financial sector deregulation and tax breaks that precluded the 2008 financial crash
Until he died in 2023, he was the chair of the abrdn Financial Fairness Trust (since 2017). It means Darling would have been sitting as chair when the trust approved this grant to the Fabian Society. In other words, Darling likely had a significant say in the decision to hand over £90,000 to the think tank.
Besides Darling, other notable abrdn trustees also included Matthew Upton. Upton has been acting policy director of Keir Starmer chief of staff Morgan McSweeney’s notorious Labour Together think tank. This is of course the same think tank that, fresh off the back of his humiliating election defeat, Ashworth had swiftly took over as chief executive. The Canary’s Steve Topple also previously revealed how it was Labour Together that has been driving the government’s recent cuts to cull disabled people.
Ashworth stepped down from his role with Labour Together in July. Since then, Upton has taken over as the think tank’s director fulltime (though he was co-director alongside Ashworth from May).
Next to Upton at the trust, there was Naomi Eisenstadt. She’s now a non-executive director for the Department for Education (DfE) and the Department of Health and Social Care (DHSC).
Abrdn trustees who fed directly into the Fabian Society report also included Mubin Haq and Kate Bell. Bell is currently assistant general secretary at the Trade Union Congress (TUC). But between 2013 and 2015, she served a stint as Work and Pensions policy advisor to then Labour leader Ed Miliband.
Insurance companies stand to gain from DWP changes
Aberdeen Group’s influence over the current welfare reforms vis-a-vis the Fabian Society is a microcosm of the broader corporate to think tank to Westminster pipeline.
And of course, insurance companies stand to gain from a more exclusionary, scaled-back welfare system. It would invariably coerce people into taking out Income Protection Insurance (IPI) and other insurance policies.
As the Canary previously highlighted:
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.
What’s more, industry body the Association of British Insurers (ABI) is also a prominent financier of the Fabian Society. In 2023, the ABI contributed £9,250 to the Fabian Society for Labour’s annual conference. It has also given the Fabian Society grants for the Labour Party conference in other recent years, including in 2022.
Ultimately, it’s not surprising that the Labour right-connected think tank has its finger prints all over the DWP’s upcoming cuts to chronically ill and disabled people’s benefits. It’s Fabians calling the shots in this callous Labour government from the very top. And it’s evidently through these fervent Fabians that corporate capitalists reign triumphant at Whitehall.
The insurance industry running roughshod over disabled communities has long been a feature of successive neoliberal governments of the past two decades. Now however, under this Labour government, it’s getting a new lease of life to lobby welfare into oblivion.
Featured image via the Canary
This post was originally published on Canary.