Reform UK's plan for welfare: IFS response

Tom Waters, an Associate Director at IFS, said: 

“Reform UK plan to save around £50 billion a year, almost entirely from a working-age benefits bill that, in 2030–31, is forecast to be a little over £200 billion. As well as a smaller benefit system, the Reform UK proposals represent a substantially different vision of what the benefit system should be doing.

Non-UK citizens would largely become ineligible for working-age benefits. How much this saves would depend on how many of this group became citizens in response. Savings could be large if a Reform government followed through on making it hard for anyone who has previously claimed benefits to become a citizen. Removing benefits from non-UK citizens would mean large overnight cuts to claimants’ incomes and imply significant increases in hardship – some of this group get most or all of their income from benefits at present. There are currently around 1.3 million non-UK citizens who claim universal credit, of which 650,000 are not in employment.

For disability benefits, Reform envisage a system that is much harder to qualify for, that provides more in-kind support such as equipment rather than cash, that means-tests supports away from better-off households, and whose burden is shouldered slightly more by employers. Most of the planned savings here would come from a new disability needs assessment which is intended to be substantially tougher. But there is relatively little detail on what the new assessment would actually entail or on how they would avoid the experience of previous attempts to toughen up the system, which saw savings falling significantly short of government’s expectations.  

Another technical-sounding proposal that is in fact of real significance is a proposed switch to a lower measure of inflation for uprating benefits each year. This would be expected to save £4.8bn in 2033–34 and, compared to the current rules, would continue to shrink the size of the benefit system indefinitely.”