People who “can work, must work” Liz Kendall has said, as she set out an overhaul of the welfare system aimed at getting people back to work after suffering from long-term illness.

The Work and Pensions Secretary warned the benefits bill for sickness and disability is set to rise “by £26 billion by the end of this Parliament” as she announced the plans in the House of Commons.

She claimed the Conservatives had failed to create “good jobs in every part of the country, to deliver on the NHS and to properly reform welfare”.

Speaking in the House of Commons, the Cabinet minister added: “But under our Government, this will change, with new opportunities matched by the responsibility to take them up. Because under this Labour government, if you can work, you must work.”

The Government’s “Get Britain Working Again” plan, published on Tuesday, is primarily aimed at returning some of the 2.8 million people out of work due to long-term sickness to the workplace.

Long-term sickness has been a major driver in joblessness since the pandemic, having risen from approximately 2 million in 2019.

The 20 places in England with the highest levels of joblessness will get more NHS staff to help cut waiting lists as part of the plans.

Extra mental health support is also set to be rolled out to coach people with mental illnesses into work, while job centres will be replaced by a new National Jobs and Careers Service.

The Work and Pensions Secretary said a “radically improved digital offer” to be trialled at some jobcentres will help improve the efficiency of services.

She added that video and phone support for jobseekers would provide a “job centre in your pocket”.

Young people will meanwhile be offered a “guarantee” of an apprenticeship, training or help in finding a job.

Ms Kendall told the Commons the commitment showed the Government valued young people.

Liz Kendall visit to Peterborough
Work and Pensions Secretary Liz Kendall said those who can work, must work as the Government rolled out its plan to ‘Get Britain Working Again’

She added: “You are important. We will invest in you and give you the chances and choices you deserve.

“But in return for these new opportunities, you have a responsibility to take them up, because being unemployed or lacking basic qualifications when you’re young can harm your job prospects and wages for the rest of your life, and that is not good enough for young people or for our country.”

During the election, Labour promised to increase the employment rate to 80% from its current level of around 75%, which would mean around two million more people in work.

Ms Kendall did not set a date for this target as she set out her plans, but said ministers were taking “first steps towards delivering our bold ambition of an 80% employment rate”.

Shadow work and pensions secretary Helen Whately accused Labour of having “dodged the tough decisions”, and pressed Ms Kendall on why she had not revealed her plan to crack down on sickness benefits.

“Where are the reforms to fit notes, which we had handed over all ready to go? Where is her plan for reforming the workplace capability assessment? She has banked the £3 billion of savings from our plan, but failed to set out her own,” the senior Tory said.

At the Budget, Chancellor Rachel Reeves suggested the Government would honour a commitment made by the Tories to reform the work capability assessment, the test which deems whether someone with a health condition or disability is fit to work.

The Conservatives had claimed in office that their reforms to the test would save £3 billion.

Downing Street indicated these plans would be set out separately in the spring so they are not rushed, describing the work capability assessment as “clearly a really complex area”, which would “affect millions of people” if changed.

The Resolution Foundation think tank said the welfare reforms could boost living standards but warned the plan “needs proper resourcing to really make a difference”.

“It’s not yet clear, for example, how the Government will ensure that there are enough employment, training and apprenticeship opportunities to make its ‘job guarantee’ cast-iron for young people,” said Greg Thwaites, research director at the think tank.

The Confederation of British Industry (CBI) urged the Government to “join the dots” between its decision to increase national insurance contributions for employers at the Budget, which it warned will increase employment costs, and ministers’ hopes of getting people back into work.

Matthew Percival, work and skills director at the CBI, said the Government “deserves credit” for seeking to grip the “critical challenge” of long-term sickness preventing people from returning to work.

He added: “The Government can make it easier for businesses to invest in employee health by taking a pragmatic approach to the Employment Rights Bill and expanding tax-free occupational health support.

“CBI analysis shows 49% of businesses would reinvest tax savings into further employee health support, with an additional 26% investing more.”