UK Aims to Cut Billions in Welfare Amid Budget Crunch

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.