Welfare announcement ‘disappointing’ and only a ‘flea bite’ of savings, IEA Fellow
18 March 2025
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Economics
14 March 2025
Labour Market
18 March 2025
Brexit
Responding to the welfare changes announced today Professor Len Shackleton, Editorial and Research Fellow at the free market think tank the Institute of Economic Affairs, said:
“Today’s announcement will upset disability campaigners and Labour’s back-benchers, but will do nothing much to reform benefits or save significant amounts of money.
“Eligibility for PIP certainly needs to be narrowed, but it remains to be seen just how this will be accomplished. It certainly makes sense to have a common fitness to work test for PIP and universal credit, but this test needs to be much tougher – and assessed in person – than either of the existing measures. It is also sensible to merge jobseekers’ and employment support allowances, but this is subject to consultation which may find it is too difficult to implement.
“The ‘right-to-try’ idea is a good one, but it needs to be taken seriously. Claimants should be expected to make a proper effort at a job, for their sake and that of the employer, rather than reverting back to benefits too quickly.
“Any hopes that cuts in the benefits system would generate sufficient savings to reduce government borrowing or contribute to higher defence spending will be disappointed. Even if the planned £5 billion savings are achieved – and this is doubtful, given likely concessions to pressure groups – this is over a five-year period when other elements of spending will surely be rising. It is any case a flea-bite in the context of total welfare spending.
“Overall, a disappointing announcement which simply serves to provide the Commons with another opportunity for a shouty afternoon.”
“Today’s announcement will upset disability campaigners and Labour’s back-benchers, but will do nothing much to reform benefits or save significant amounts of money.
“Eligibility for PIP certainly needs to be narrowed, but it remains to be seen just how this will be accomplished. It certainly makes sense to have a common fitness to work test for PIP and universal credit, but this test needs to be much tougher – and assessed in person – than either of the existing measures. It is also sensible to merge jobseekers’ and employment support allowances, but this is subject to consultation which may find it is too difficult to implement.
“The ‘right-to-try’ idea is a good one, but it needs to be taken seriously. Claimants should be expected to make a proper effort at a job, for their sake and that of the employer, rather than reverting back to benefits too quickly.
“Any hopes that cuts in the benefits system would generate sufficient savings to reduce government borrowing or contribute to higher defence spending will be disappointed. Even if the planned £5 billion savings are achieved – and this is doubtful, given likely concessions to pressure groups – this is over a five-year period when other elements of spending will surely be rising. It is any case a flea-bite in the context of total welfare spending.
“Overall, a disappointing announcement which simply serves to provide the Commons with another opportunity for a shouty afternoon.”
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