It comes after Prime Minister Sir Keir Starmer delayed welfare reforms, with changes unlikely to come before 2029.
The UK will become the G7’s biggest spender on benefits (Image: Getty)
The UK is set to become the biggest spender on benefits in the G7 by the end of the decade. Figures from the Office for Budget Responsibility (OBR) show that Britain is forecast to spend 2.2% of GDP on health benefits in 2030/2031.
According to figures from the Organisation for Economic Co-operation and Development (OECD), this figure would be the highest among G7 countries. The UK remains the only member of the group where the percentage of people in work is still smaller than before the Covid-19 pandemic. Data shows that four million of the eight million people claiming Universal Credit, Britain’s main jobless benefit, have no obligation to look for employment.
Sir Keir Starmer recently vetoed plans to reform the UK’s welfare system. The Department of Work and Pensions (DWP) was told it will not be able to introduce new changes until next year at the earliest, meaning it is unlikely reforms will be implemented before the next General Election in 2029.
Sir Mel Stride, the shadow chancellor, said the latest data shows a “huge waste of human potential” in the UK as millions of Brits are on benefits with “no work requirements at all.” He added that their failure to reform the welfare system has come at a huge cost to the taxpayer.
The UK ranked in the middle of the G7 countries in spending on sickness and disability payments between 2021 and 2023. At the time, Britain spent less than Italy, France and Germany.
However, the UK is expected to leapfrog these countries according to the latest forecasts. It’s 2.2% of GDP spend will top Italy and France’s 1.8%, Germany’s 1.5% and the United States’ 0.8%.
Eduin Latimer, from the Institute of Fiscal Studies (IFS), said that the rise in health-related inactivity in the UK is not reciprocated elsewhere. He said that the number of people not working due to health reasons in Britain is increasing, with similar trends not emerging in other countries.
The UK is forecast to spend 2.2% on GDP on health-related benefits (Image: Getty)
According to Mr Latimer, a number of factors are contributing to the issue in the UK, including a rise in mental health conditions, the rising cost of living and the health-related benefit system. Meanwhile, deputy leader of Reform UK Richard Tice said the Prime Minister will be “forced to save money on welfare”.
He added: “Imagine motivating many of those people back into work with carrot and stick; then spending the savings on our defence. A real win-win.”
A Government spokesperson said: “We’re fixing the broken welfare system we inherited, including through a package of measures to tackle the backlog of people waiting for a work capability assessment and save nearly £2bn by the end of the decade.
“This is on top of changes to Universal Credit to narrow the gap between what people receive for being unemployed compared to long-term sickness and the Timms Review, which will make sure PIP is fit and fair for the future.”
