Britain’s Labour government announced plans today to cut more than five billion pounds from its welfare budget by 2029/30, seeking to tame a sharply rising bill despite unrest among some of the party’s lawmakers.
The cuts are a prelude to a March 26 fiscal statement which is set to be the moment when pre-election promises to limit tax rises and tightly control borrowing meet the reality of lower-than-expected growth and tax revenues and a worsening global economic backdrop.
Ministers are pulling every lever they can to boost growth and reduce spending, seeking to stay on track to meet a self-imposed fiscal constraint of balancing day-to-day public spending with tax revenues by the end of the decade.
That drive has put the focus on the welfare budget, which supports people with disabilities and long-term health conditions and already exceeds the country’s defence budget. It is set to top 100 billion pounds by 2030.
Ministers see welfare reform as an opportunity to cut costs while boosting the economy by getting more people into work.
“This is a significant reform package that is expected to save over 5 billion pounds in 2029/30,” work and pensions minister Liz Kendall said in a statement to parliament.
“The status quo is unacceptable, but it is not inevitable. We were elected on a mandate for change, to end a sticking plaster approach and tackle the root causes of problems in this country that have been ignored for too long.”
Even before the details of the cuts were announced, some in the Labour Party – elected by a landslide last year promising a decade of renewal – had expressed concerns over whether cutting benefits was in line with the party’s centre-left values.
Last year, a decision to cut winter fuel payments for some pension-age Britons provoked a bitter internal party dispute.
Prime Minister Keir Starmer’s government has rejected any suggestion it is repeating an austerity drive that was overseen by a Conservative-led government after the global financial crash, which Labour blames for many of Britain’s long-term economic problems.
