Britain’s center-left government outlined plans on Tuesday to curb spiraling welfare costs as it attempts to juggle a difficult set of competing objectives: saving public money, incentivizing work and protecting the most vulnerable.
The announcement follows weeks of tense internal debate within the governing Labour Party, led by Prime Minister Keir Starmer, about how to cut Britain’s spending on welfare, which has risen sharply since the Covid-19 pandemic.
“The status quo is unacceptable but it is not inevitable,” Liz Kendall, the work and pensions secretary, said in Parliament, promising “decisive action” to get those who can work into employment, protect those who cannot, and save five billion pounds (about $6.5 billion) by 2030.
For Labour, a party that sees itself as the creator and guardian of Britain’s post-World War II welfare state, cutting support for some of the most vulnerable in society is especially contentious.
But Britain, with a total population of about 68 million, now has more than 9.3 million people of working age across England, Scotland and Wales who are not employed, a rise of 713,000 since 2020. Of those, 2.8 million receive long-term sickness payments or related welfare, according to the government, which expects the number to grow to more than four million if nothing is done. The government spent £65 billion on sickness payments last year.
Facing mounting pressure to increase military spending, at a time when public services including the health system are badly underfunded, and economic growth is sluggish, Britain’s Treasury is searching for cuts to public programs.
But the government insists there is also a strong moral case for helping people off welfare and into the work force. “Many sick and disabled people want to work with the right support,” Ms. Kendall told lawmakers, citing a litany of failings that she said the government had inherited from the previous Conservative government. “One in 10 people of working age now claiming a sickness or disability benefit; almost one million young people not in education, employment or training. That is one in eight of all our young people.”
Under the new plans, people on some programs will be given the “right to try” work without losing their entitlement to welfare, so that if their job does not work out, they do not have to reapply and then wait for financial support to be restored.
Eligibility will be tightened for those receiving a Personal Independence Payment, which is designed to support disabled people whether or not they are in work. The government says there are more than 3.6 million claimants and around a thousand new applications each day, making Britain a European outlier in economic inactivity.
“That is not sustainable long term, above all for the people who depend on this support,” Ms. Kendall said. However, she also announced that those with severe, lifelong disabilities should not usually have to face reassessment of their payments, as some do at present.
Parts of the government’s proposals may not apply outside England — particularly in Scotland, which has the power to set its own policy on many aspects of welfare, or in Northern Ireland, where welfare policy is also administered separately.
By European standards, Britain’s welfare state is not particularly generous but is relatively easy to access. Because of the way the programs are structured, it can be more advantageous to be declared unable to work than to be unemployed, something Ms. Kendall promised to tackle.
Some on the left of the Labour Party fear the initiative is emblematic of a slow but steady rightward shift by Mr. Starmer, who once served in a senior position in opposition under Jeremy Corbyn, a veteran left-winger.
After succeeding Mr. Corbyn as party leader, Mr. Starmer purged him from the party. Since winning power last July, Labour has announced several policies that some on the left of the party have found hard to stomach, including restricting cash handouts to help with winter fuel bills to only the poorest retirees, and diverting spending from overseas development aid to the military.
Last week in Parliament, the health secretary, Wes Streeting, taunted members of the opposition Conservative Party, telling them: “It must be so painful for them to watch a Labour government doing the things that they only ever talked about: reducing bloated state bureaucracy, investing in defense, reforming our public services and bringing down the welfare bill.”
Mr. Starmer likes to style himself as a pragmatist and the government argues that tackling working-age inactivity will help the poorest if it provides them the support and incentive to get into the labor market.
More than half of the rise in working-age disability claims since the Covid-19 pandemic relates to mental health or behavioral conditions, according to the Institute for Fiscal Studies, a research group.
But Rachael Maskell, a Labour lawmaker, speaking before the announcement, called for a welfare policy “which supports people, not harms people.”
“We need to ensure that people are getting the support that they need in order to be safe and independent,” she told the BBC, “but also where we can help people into work that’s absolutely the right thing to do.”
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