Britain’s center-left government announced plans on Tuesday to address rising welfare costs amidst competing priorities of saving public funds, incentivizing work, and protecting vulnerable populations.
The announcement followed weeks of internal discussion within the Labour Party, led by Prime Minister Keir Starmer, regarding necessary cuts to welfare spending, which has surged since the onset of the Covid-19 pandemic.
Work and Pensions Secretary Liz Kendall declared in Parliament that “the status quo is unacceptable but it is not inevitable,” committing to “decisive action” to transition those who are able to work into employment while safeguarding support for those who cannot. The aim is to save £5 billion (approximately $6.5 billion) by 2030.
The Labour Party, historically seen as the architect of Britain’s post-World War II welfare state, faces controversy in cutting aid for vulnerable individuals. Current statistics show over 9.3 million working-age individuals in England, Scotland, and Wales are unemployed, an increase of 713,000 since 2020. Of these, 2.8 million rely on long-term sickness payments, a number expected to exceed four million if no action is taken. The government allocated £65 billion to sickness payments last year.
In light of pressures to boost military expenditure and address underfunding in public services, including the health system, the U.K. Treasury is exploring cuts to various public programs.
The government stresses the moral imperative to assist individuals in moving off welfare and into the workforce. “Many sick and disabled people want to work with the right support,” Kendall stated, highlighting challenges inherited from the previous Conservative government, including high youth unemployment and disability benefit claims.
The proposed plans include giving individuals on certain programs the “right to try” work without forfeiting their welfare entitlements, so they can resume their claims if employment does not succeed. Eligibility for the Personal Independence Payment, aimed at supporting disabled individuals regardless of employment status, will be tightened. The government noted that there are over 3.6 million claimants in Britain, with around a thousand new applications per day.
Parts of the proposals may not extend to Scotland or Northern Ireland, where welfare policies are independently managed. British welfare, while not exceptionally generous by European standards, is relatively accessible, leading to situations where being deemed unable to work can be more favorable than unemployment.
Some Labour Party members express concern that this initiative signals a gradual shift to the right under Starmer, who previously led the party under a more left-leaning agenda. Since taking leadership, Starmer has implemented policies that some members find contentious, including limiting cash support for winter fuel bills and reallocating overseas aid to military funding.
Health Secretary Wes Streeting recently remarked that it must be “painful” for the opposition Conservative Party to witness a Labour government enacting policies they had previously only discussed, including reducing state bureaucracy and reforming public services.
Starmer presents himself as a pragmatist and advocates that addressing working-age inactivity will ultimately benefit the poorest by facilitating their entry into the labor market. Data from the Institute for Fiscal Studies indicates that more than half of the increase in working-age disability claims since the pandemic can be attributed to mental health or behavioral issues.
Prior to the announcement, Labour lawmaker Rachael Maskell urged for welfare policies that “support people, not harm people,” emphasizing the necessity of ensuring individuals receive adequate support while also promoting pathways into work.