Millions of households across the UK are facing an average annual financial hit of £700 following significant changes to welfare policy by the Department for Work and Pensions (DWP).
Abandoned Reforms and Soaring Costs
The Labour Party government has decided to abandon planned welfare savings, a move that the Centre for Social Justice (CSJ) claims will have severe financial consequences. According to the think tank, this decision will result in sickness benefits costing an additional £27 billion by 2030.
Joe Shalam, Policy Director at the Centre for Social Justice, stated that the system's failure is evident. "Abandoning proper welfare reform while costs surge is a political choice with a £27 billion bill attached," he said. "That bill lands on every taxpayer, and even worse, a lost generation will be stuck on benefits with no route back to work or independence."
Two-Child Benefit Cap Reversal
This development coincides with Chancellor Rachel Reeves's plans to completely remove the two-child benefit cap in the upcoming November budget. This reversal of the Conservative-era measure is expected to cost more than £3 billion but has the potential to lift approximately 350,000 children out of poverty.
Defending the decision, the Chancellor told BBC Radio 5 Live, "I don't think we can lose sight of the costs to our economy in allowing child poverty to go unchecked. In the end, a child should not be penalised because their parents don't have very much money."
She elaborated on the complex circumstances families face, citing reasons such as chronic illness, bereavement, adoption, and foster care. "I don't think that it's right that a child is penalised because they are in a bigger family, through no fault of their own," Reeves added.
The Wider Impact on Taxpayers
The CSJ's analysis frames the government's policy shift as a botched attempt to cut DWP spending that will ultimately punish taxpayers. With each household effectively being saddled with hundreds of pounds in extra costs annually, the debate over the nation's welfare system and its funding is set to intensify in the lead-up to the Budget.
