Britain’s spending on health-related benefits could reach £100billion by 2030 – approaching double the nation’s current outgoings on defence.
Spending on incapacity and disability benefits has risen by 40 per cent in real terms since 2013 to £64.7billion – a fifth more than the £53.9billion spent on defence last year.
In a scathing House of Lords report, peers warned that this figure is set to rise to £100.7billion by 2030 – equivalent to three per cent of GDP. Defence spending currently sits at 2.29 per cent of GDP, £64.4 billion, with the Prime Minister resisting calls to increase the proportion to 2.5.
Ministers were told they must ensure radical reforms to the ‘financially unsustainable’ welfare system are the government’s ‘top priority’.
Today Chief Secretary to the Treasury Darren Jones will lay out new laws to crack down on benefit fraud and recover money from the bank accounts of benefits cheats refusing to pay up.
He will also admit that the UK is ‘long overdue a reckoning with government spending, and a realistic appraisal of how we are using taxpayers’ money..’ This Labour government, he will say, will ‘focus on driving efficiency and value for money extends to our approach to welfare’.
Around 3.7 million working-age people receive health-related benefits, 1.2 million more than before the pandemic.
Spending on incapacity and disability benefits has risen by 40 per cent in real terms since 2013 to £64.7billion – a fifth more than the £53.9billion spent on defence last year (file image)
Chief Secretary to the Treasury Darren Jones (pictured) will lay out new laws to crack down on benefit fraud and recover money from the bank accounts of benefits cheats refusing to pay up
Lord Bridges of Headley, Chair of the Economic Affairs Committee, said in the Lord’s report: ‘The health benefits system is financially unsustainable, wastes human potential and – in the words of the Employment Minister – “does not work for anybody”.
‘Urgent action is needed to reform both the unemployment and health-related benefits system, and how they interact.
‘Without a clear plan of action, growing welfare spending will remain a significant challenge for the forthcoming Spending Review.’
Ministers have pledged to crack down on Britain’s welfare bill to ‘deliver savings’ and ensure money can be spent in other areas.
Work and Pensions Secretary Liz Kendall is expected to submit a Green Paper on her reforms in March, which will then be consulted on before concrete proposals are made.
Ministers have pledged to crack down on Britain’s welfare bill to ‘deliver savings’ and ensure money can be spent in other areas
Last week Sir Keir Starmer vowed to be ‘ruthless with cuts’ if needed, though some Labour MPs are concerned that ministers may go too far.
The report came amid suggestions that Labour’s Strategic Defence Review could now be delayed until autumn, despite initial plans for it to be ready by the first half of 2025.
The Prime Minister has pledged to eventually increase the UK’s defence spending to 2.5 per cent of GDP amid threats from Russia and China, but will not put an ‘arbitrary date’ on when that will be achieved.
He is likely to face renewed calls to speed up the process as US President Donald Trump, who has called for NATO member nations to spend five per cent of GDP on defence, enters the White House.
