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Good afternoon and welcome to this week’s The State We’re In. Let’s look at the benefits system and, specifically, how it treats people with mental health conditions who need support.
If you’re reading coverage of the debate about welfare reform and, in particular, the convergence of three major reviews on the subject and wondering how it all fits together, this newsletter is for you.
Coming up in this week’s newsletter:
- Why the government may end up giving people with mental health conditions more support as part of welfare reforms…
- Former Tory Work and Pensions secretary Iain Duncan Smith tells me he has unfinished business when it comes to the benefits system.
- And, why, finally, Britain’s housing market is in big trouble…
How the licence fee could be scrapped for a new monthly charge
The licence fee could be axed and replaced by an £11-a-month internet levy – and viewers invited to become “BBC members” – under new proposals.
The licence fee is becoming increasingly unsustainable, with 3.7 million households claiming to not need one, while half a million households stopped paying last year, forcing the BBC to find £500m in cuts.
‘Home internet levy’ fairest solution
A “home internet levy” method of funding is most likely to command public consent, the report, commissioned by campaign organisation 38 Degrees, found.
A BBC internet levy would cost £11 per month, an average increase of 35 per cent on the current cost of internet bills, but would be £4 a month cheaper than the current licence fee.
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The other proposals for the BBC
The report looked at other funding solutions such as keeping the licence fee, but adding a “news and culture levy” of £2.30 on to internet bills.
Also proposed was a £12 a month “household levy” or putting the cost of the licence fee on to streaming subscriptions.
Make BBC a ‘mutual’ society
- The report also proposed radical changes to make the BBC more accountable to the public by becoming a “mutual-style membership” organisation.
- Members would be chosen by lottery to take part in a member council, where they would serve terms of up to three years and be paid for their time.
- They would “hold the board of the BBC to account, ensuring that the organisation is meeting its duties to the public”.
- Under the proposals, the council would have no control over editorial decisions, hiring talent or decisions on programming.
The four key moments from Burnham’s meeting with Trump
There was no shortage of trip-wires that could have derailed Andy Burnham’s first meeting with Donald Trump, but in the end, it produced remarkably little friction.
Even without the charm offensive, Trump liked Burnham better than Starmer
In July, when Trump met Sir Keir Starmer at the Nato summit in Turkey after he had announced his resignation, the US President said he wanted to “bring him back” and “make him great again”.
Two months on, that affection has evaporated. Asked about a special relationship that has been up and down, Trump said things were “more up than they were under your last prime minister”.
No Trump attack on UK migration policy
Trump has previously said Britain is “on the edge of disaster” because of “insane” immigration policies, but in New York, he called it “a worldwide situation”.
For a Labour Prime Minister under pressure on small boats, being spared a public rebuke on his first outing is significant.
Trump thinks Britain has ‘tremendous potential’
Trump has previously called the UK “essentially bankrupt” for refusing to fully exploit North Sea oil and for relying on green energy. He has also claimed the country is “dying” under alleged mass migration.
This time he said Britain had “tremendous potential” and compared it favourably with other countries whose leaders he meets but in which he sees little promise.
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Burnham swerved a Trump rebuke over West Bank
- Many expected Washington to condemn Britain’s sanctions on illegal West Bank settlements.
- When asked directly, Trump did not engage. He said he did not know about the move and left the question for Burnham to answer.
- It was an odd moment, but a useful one for No 10. A US president who wanted to punish Britain had an open invitation to do so and passed it up.
Vapes and prescription medicine now used to spike victims
Drug-laced vapes, as well as prescription and over-the-counter medications, are increasingly being used to spike victims, police have said.
Various drugs used in vapes
Cases have emerged where officers have encountered vapes containing THC, the primary psychoactive compound in cannabis, and the synthetic drug spice, alongside the use of high doses of common medications such as antihistamines and travel-sickness tablets.
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Victims targeted in private settings
We’re seeing offenders use a wider range of substances than ever before, including everyday medications and substances added to vapes, while increasingly targeting victims in private settings such as homes, parties and student accommodation
Metropolitan police spiking lead Detective Superintendent Dan Thompson
How widespread is the issue?
- Over the past year, more than 2,700 spiking-related offences were reported to the Met, but only 131 resulted in a charge, caution or summons.
- This marked a 20 per cent increase over the previous year.
- More than half the victims were aged 18 to 35.
- A YouGov poll from December 2022 found that 10 per cent of women and 5 per cent of men said they had had a drink spiked.
How one test could ‘transform’ womb cancer care
A simple test analysing cells in urine and vaginal fluid could help rule out womb cancer in women experiencing bleeding after menopause.
Women could avoid invasive tests
The new test has the potential to “transform care” researchers said, sparing patients from “invasive, uncomfortable” tests that are costly for the NHS.
Around 10,200 women are diagnosed with womb cancer in the UK each year. Bleeding after menopause is a common symptom and can trigger urgent cancer referral.
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A closer look at the study
- The research included 1,864 women attending hospital with postmenopausal bleeding.
- The test correctly identified 80 per cent of cancers.
- It had a negative predictive value of 98.8 per cent for womb cancer, meaning women with a negative result were very unlikely to have the disease.
- It also detected 95.8 per cent of high-grade tumours and 96.4 per cent of cancers that had spread beyond the uterus.
Children as young as 13 diagnosed with ‘ketamine bladder’
Children as young as 13 have been referred to a specialist clinic with ketamine-induced uropathy (KIU), according to new analysis.
What is ‘ketamine bladder’?
KIU – also known as ketamine bladder – is a painful and severe condition caused by the drug damaging the urinary tubes, kidneys and bladder.
- Frequent urination, blood in urine and a loss of bladder control are some of the symptoms.
- The UK’s first KIU clinic opened in May 2025 due to a rise in young people with the condition.
Which children are most affected?
- The average age of the first 60 patients was 14.
- Around 66 per cent of the patients were girls, with a similar proportion living in the most deprived areas.
- 72 per cent had experienced emotional trauma, with one in five having experienced the care system.
- 16 of the children had autism or ADHD, or both.
The underlying factors
We are trying to understand the wider picture. use does not happen in isolation, and our analysis is helping us explore the different factors that may be associated with young people developing serious health problems
Professor Rachel Isba, consultant in paediatric public health medicine at Alder Hey Children’s NHS Foundation Trust
Royal claims you haven’t heard as Earl Spencer’s book published
With Earl Spencer’s controversial book Swan Song: Diana, My Sister now released, The i Paper has taken a closer look at some of the claims.
Here are five of the most eye-catching.
Charles acted like ‘child’
Then-prince Charles acted like a “petulant” child, according to Spencer. Charles is said to have told the author that he was “lucky” to be inheriting the Althorp Estate while still in his twenties.
- According to Spencer, Charles told him: “You’re just so lucky – you know, inheriting when you’re so young. I mean, I’m 43… and I employ 50 people … but my parents insist on treating me like – like a child!”
A closer look at the claims
Spencer claims, via a courtier, that the late Queen Elizabeth II said Charles was “resentful”. “He always resents things. He even resented it when I taught him the alphabet.”
He also wrote about Elizabeth’s apparent response to the news Diana was involved in an accident. “When the Queen had heard the first news of Diana’s being in a traffic accident, she had asked tetchily, ‘What is she up to now?’” he wrote. “This, before the seriousness of it all became clear.”
Diana suspected Charles had ‘tryst’ with Camilla on train
Diana suspected that Charles may have had a “tryst” with Camilla, according to the book. The suspicion followed a press report in 1980 which claimed Charles was seen with a blonde woman on the royal train.
However, Spencer wrote that this was not Diana and that she suspected that it was Camilla on the train.
Law firm offered to help him sue over Diana crash
Earl Spencer claims that a law firm offered to help him, William and Harry sue over the crash that killed Diana in France.
He said that he did not reply to the letter.
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Morgan threatens to sue
Piers Morgan has threatened to sue Earl Spencer after claiming that there are “fabricated inaccuracies” in the book.
- The Earl claimed that Morgan “snarled with annoyance” after he was uninvited from Diana’s funeral.
The reaction
- Earl Spencer, responding to the Palace’s pushback over Charles’s alleged words, told the BBC: “Those are exactly the words he said.”
- He has also denied being vengeful. “I don’t hold resentments,” he told .
- Buckingham Palace has declined to comment on the latest revelations and referred back to Wednesday’s initial statement.
- Earl Spencer was approached for further comment.
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I will attempt to explain how multiple things can be true at once: yes, there has been an uptick in the number of people, particularly younger adults, with mental health conditions, and some of them are economically inactive. But this is not necessarily through choice or desire, as is so often suggested in stigmatising coverage of their situation.
Instead, they are often encouraged into economic inactivity through our benefits system which, as Work and Pensions Secretary Pat McFadden often puts it, regularly signs people off and writes them off.
According to the latest Department for Work and Pensions (DWP) data, one in five working-age adults (20.3 per cent) are now claiming Universal Credit, totalling roughly 7.3 million people.
Among these claimants are a higher number of younger people, with 3.3 million individuals under the age of 40 now receiving Universal Credit.
Exclusive analysis of national data for this newsletter by the Money and Mental Health Policy Institute (the charity founded and chaired by Martin Lewis), finds that two out of five adults in England who are unemployed or economically inactive have a common mental health condition such as depression or anxiety.
If reflected across the UK, that would amount to 4.2 million people in total.
As things stand, however, the benefits system often not only encourages these people into economic inactivity, but, worse, can make it difficult for them to re-enter work.
Consider Emma. She is now in her early 30s and living in Newcastle.
In 2017, Emma was working at a very high level as an intensive care nurse. Her mental health had been faltering for years and, eventually, it became severe, and she quit her job. Then followed a diagnosis of bipolar disorder and OCD. She was just 25 at the time.
“I’d been struggling for a while, but there was so much stigma that I didn’t speak out,” Emma says. “I was so worried, I didn’t want people to judge.”
The issues arose when Emma encountered the benefits system.
“An occupational therapist from the mental health crisis team encouraged me to apply for Universal Credit,” Emma explains. “It was such a challenging time because I had gone from working in the public sector to feeling like I was just a drain on society and the state’s resources.”
Emma was initially allocated to a work group but “quickly dismissed” and signed off because she was “deemed to be too unwell”.
“I also didn’t know that I had somehow been classed as having a disability until I got a benefits letter through. I found that really difficult to process – going from a care provider and then being told that I had a disability via a financial letter. I didn’t accept that.”
Emma was paid around £500 a month in Disability Living Allowance (DLA) and Employment Support Allowance (ESA).
When she restarted work on a self-employed basis, she told the Mental Health Community Service (who was supporting her with her recovery) that they said they could no longer support her and signed her off from that because she was now “too well” for that support.
However, now working in Ovarian Cancer research and shared decision-making, Emma sees work as a “key part” of her recovery.
“It gives me purpose,” she says. “I never had any further contact from the DWP work group, and I felt like I had just been labelled as someone who couldn’t work.”
Now able to reflect on her situation, Emma wishes she had been contacted more, but in a “sensitive way”.
“I really did need time off,” she says. “I was very unwell. But nobody picked up with me to see how I was doing or whether I was ready to try to work.”
Emma feels she was just “written off” and hopes that any welfare reforms find a compassionate way to support people into work.
Under the guidance of Work and Pensions Secretary Pat McFadden, disabilities minister Sir Stephen Timms, youth unemployment chief Alan Milburn and clinical psychologist Peter Fonagy, Labour wants to fix this.
Pat McFadden has told me that the benefits system “writes people off” as a “feature, not a bug” of the system.
So, what to do? Three major and interconnected reviews are currently under way from Timms, Milburn and Fonagy, respectively. All of them look at welfare, economic inactivity, disability benefits, and the rising demand for mental health support.
Fonagy is specifically investigating why there has been a surge in demand for mental health support in England, zeroing in on whether support gaps drive diagnostic inflation.
Earlier this week, the clinician came out and said that young people are “not snowflakes” and warned that the mental “distress” they are experiencing is very real.
Milburn, with whom I travelled to the Netherlands to look at the European country’s support for younger people, is looking specifically at the plight of NEETs – young people who are not in Education, Employment or Training.
As he told me during that trip, he is increasingly firm in the view that work is part of the answer to the anxiety and isolation many young people feel. But, equally, that more money will need to be spent on support.
And, finally, Timms is looking at how to reform Personal Independence Payments (PIP – formerly the benefit known as DLA, which Emma received). In particular, he is looking at what support will be best for people experiencing mental health problems.
Fix the system Labour must. The wellbeing and life chances of millions of people, like Emma, now depend upon them being able to do so.
I have now travelled across Britain and Europe looking at our benefits system, and how it compares to the Netherlands, where youth unemployment is less than half Britain’s.
What is going wrong? It is, undeniably, a lack of person-centred and specific support which helps, rather than forces, people back into the workplace if that is something they are up to doing.
Some progress has been made. I’ve sat with specialist youth work coaches and employers who are giving 18- 24-year-olds opportunities under the government’s Jobs Guarantee scheme. But for those slightly older, Emma’s generation, the scars of being “written off” and made to feel like a “burden”, as she put it, will take time to heal.
For their part, the Money and Mental Health Policy Institute are calling for more support.
Commenting on the research, Conor D’Arcy, the organisation’s deputy chief executive, said the government had a “once in a generation opportunity” to change things.
They hope that change will look like “prioritising tailored employment support to get people into the right role and showing employers what good workplace support looks like. Addressing what people actually say would help them find and stay in jobs, rather than increasing conditionality and benefits sanctions, is the best way to get Britain working.”
Long term, such measures could certainly reduce Britain’s benefits bill. However, if Burnham was hoping that any of his three major reviews would yield savings ahead of what is going to be a very tricky Autumn Budget, he may, as Milburn alluded to me in the Netherlands, find that he has to spend money to save money when it comes to the rising number of people who need state support because of a mental health problem.
A spokesperson for the DWP said: “We recognise the challenges that mental health conditions can present, which is why we are committed to providing tailored support that helps people move towards their goals.”
“We also know that mental health can fluctuate, and we continue to work to improve the support available through initiatives such as Access to Work, so that more people get the right help at the right time.”
“Our £2.5 billion investment in youth employment will create nearly one million jobs and training opportunities, and further reform will follow the Milburn Review this autumn.”
You can read my full interview with Alan Milburn in the Netherlands here.
Housing crisis watch
This week I’d like to draw your attention to two exclusive stories that I have published.
The first reveals that Britain’s economic watchdog, the Office for Budget Responsibility (OBR), may revise down the growth estimates it had attached to Labour’s landmark planning reforms.
The second digs into how serious the “long and slow crash” of our housing market is and what, besides bringing back the Tories’ Help to Buy policy, this government might do about it.
I finally made it to see Christopher Nolan’s The Odyssey at the IMAX cinema inside the Science Museum at the weekend. I was worried that the film would drag but, if anything, it went by very quickly. I’ll suspend my disbelief for a moment and forgive Nolan for omitting Odysseus’s affair with the witch Circe and say that it was a brilliant, epic retelling of Homer’s poem. As allegories go, there is a message here for all of us about hubris and what happens when we put our own desires and wants above those of our community.