January 2006

The New Labour government publishes “A New Deal for Welfare” green paper, introducing the new employment and support allowance, which will replace incapacity benefit and include conditionality for most claimants.

What: “A New Deal for Welfare: Empowering people to work” sets out the Labour government’s direction for welfare reform, which introduces what will be the new employment and support allowance, to replace incapacity benefit. The green paper describes the number of claimants on incapacity benefit as “a national problem”, and says that a third of new claimants cite mental health conditions as the primary cause of their incapacity, compared with one fifth in the mid-1990s. It also says there will be conditionality for “most people” on ESA, saying: “It will be paid to most people in return for undertaking work-related interviews, agreeing an action plan and, as resources allow, participating in some form of work-related activity. If benefit claimants do not fulfil these agreed responsibilities, the new benefit will be reduced in a series of slices.”

Why significant: This provides the basis for the new out-of-work benefit that will be introduced from 2008.