UK’s Conservatives promise 12 billion-pound sickness benefit savings

LONDON (Reuters) – British Prime Minister Rishi Sunak’s Conservative Party, facing an election next month, on Saturday announced details of its plan to tighten sickness benefit rules, which it said would eventually save 12 billion pounds ($15.3 billion) a year.

Sunak, who has previously said he wants to change welfare rules to counter a rise in people dropping out of the workforce, said his reforms represented “a moral mission” as well as a way to help fix the public finances.

The plan included an increase in mental health services, more stringent assessments of people’s ability to work and tougher rules for people who refuse to take up suitable jobs.

The changes would save taxpayers 12 billion pounds a year in welfare spending by the end of the next parliament, which is due to run until 2029, the Conservatives said.

However, the Institute for Fiscal Studies, an independent think tank, said many of the planned changes were already baked into existing fiscal projections.

IFS Associate Director Tom Waters said the biggest new proposal was one aimed at reducing the number of people able to receive benefits on the basis of a mental health condition.

“Cuts are certainly possible,” he said. “But history suggests that reductions in spending are often much harder to realise than is claimed.”

Spending on welfare benefits for sick and disabled people has risen by 20 billion pounds annually since Britain’s last election in 2019 – before the COVID pandemic – to 69 billion pounds a year, and a further 10.6 billion-pound rise is expected by 2029, the IFS said.

In contrast to a rise in other major rich nations, labour force participation among working-age Britons has fallen from its pre-pandemic level mainly because of a rise in long-term illness and the number of students.

Sunak has called the national election for July 4. Opinion polls suggest his Conservatives are on course to suffer a heavy defeat to the opposition centre-left Labour Party.

Labour has said it would reduce waiting lists for health treatment to get more people back to work and check the rise in the welfare bill.

($1 = 0.7861 pounds)

(Reporting by William Schomberg; Editing by Cynthia Osterman)