Conservatives pledge welfare reforms with aim at halting rising costs

The party has claimed its latest election offer will save the public purse some £12 billion a year.

Prime Minister Rishi Sunak talking to a person at a village fete
Prime Minister Rishi Sunak talking to a person at a village fete (Peter Byrne/PA)

The Conservatives have pledged to halt the rising costs of welfare by reforming the benefits system if they win the election.

The latest offer from the Tories would help to save some £12 billion a year by the end of the next parliament, the party has claimed, by ensuring more working age people currently claiming benefits have a job.

The number of working age people who are out of work has risen sharply since the pandemic, and is thought to be driven in part by those who have taken early retirement and those with long-term health conditions waiting for treatment on the NHS.

But the Conservative Party said the 40% increase in economically inactive people from two million to 2.8 million overall since the pandemic is unsustainable.

They have promised to bring this total down, claiming the cost of providing benefits for working age people with health conditions could rise as high as £90 billion by the end of the next parliament.

Among the steps the party would take to do this are several where the early stages have been floated by the Tories in government.

This includes a £700 million investment in NHS mental health treatment, to ensure 500,000 more people can access talking therapies to help with poor mental health.

A pledge to reform the disability benefits system and target it at those most in need is also part of the offer, as is a tightening of the criteria for work capability assessments.

Previously announced plans to pass on the responsibility for issuing sick notes from GPs to specialist work and health professionals are within the Tories’ plans.

The Conservatives also promise to toughen benefit sanction rules, speed up the rollout of universal credit, and clamp down on benefit fraudsters.

Prime Minister Rishi Sunak said: “Reforming welfare is a moral mission. Work is a source of dignity, purpose and hope and I want everyone to be able to overcome whatever barriers they might face to living independent, fulfilling lives.

“That’s why we have announced a significant increase in mental health provision, as well as changes to ensure those who can work, do work.”

Labour criticised the “reheated pledges” from the Tories.

A spokesperson for Sir Keir Starmer’s party said: “This is the latest desperate announcement from Rishi Sunak, who has once again plucked numbers out of thin air in an attempt to disguise the fact that he has caused a spiralling benefits bill.

“These reheated pledges, old policies and vague promises will not get Britain healthy or benefits under control, and do nothing to solve the fact that £10 billion of taxpayers’ money was lost to benefit fraud just last year.

“Labour has a plan to cut NHS waiting lists, get Britain back to work, make work pay and get the benefits bill down.”

The Institute for Fiscal Studies (IFS) said the Tories’ claim that the measures would reduce spending by £12 billion relative to the Budget forecast “looks difficult in the extreme” as they were previously announced and have therefore already been incorporated into the forecasts.

Tom Waters, IFS associate director, said “it is understandable that whoever is in office after the election should want to take a careful look” at the growing number of people receiving financial support from the Government for a health-related benefit.

He added: “Most of the measures that the Conservatives have announced are confirming that they would go ahead with proposals that are existing government policy. Including these in their manifesto can make them easier to legislate. But they cannot be expected to deliver reductions in spending relative to the latest forecasts, since those forecasts are already predicated on most of these policies happening.

“The most substantial proposal that is not already baked into the forecast is one intended to reduce the numbers who are able to receive disability benefits on the basis of a mental health condition. Cuts are certainly possible. But history suggests that reductions in spending are often much harder to realise than is claimed.

“Delivering an additional £12 billion saving from this set of measures relative to what was forecast in the March Budget looks difficult in the extreme. That said, even if it was achieved, it would still only leave spending around its current level.”