A major welfare policy reversal by the government is set to impose significant new costs on millions of British taxpayers, according to a stark warning from a leading thinktank.
The £580 Bill for Working Households
The Department for Work and Pensions (DWP), under the new Labour government, has decided to scrap planned cuts to welfare. This move, as analysed by the Centre for Social Justice (CSJ), could cost each income taxpayer an additional £580 by 2030. The decision specifically involves dropping changes to Personal Independence Payments (PIP) and the health-related component of Universal Credit.
The CSJ's analysis reveals a dramatic projected increase in spending. Expenditure on disability-related benefits is forecast to surge from its current level of £49.6 billion to £72.3 billion within just six years. This represents a massive £22.7 billion increase in welfare spending.
Political Fallout and Tax Implications
With 39.1 million individuals paying income tax in the UK, this multi-billion pound spending increase will have a direct impact on households across the country. The thinktank issued this warning just ahead of the Labour government's crucial Autumn Budget on November 26, 2025.
The CSJ has calculated that the financial burden is substantial. They state that the £27.2 billion increase will cost each taxpayer hundreds more every year by the end of the decade. They further claim that with the same amount of money, the Chancellor could have chosen to slash 3p off income tax and still have £5 billion left over.
Calls for Reform and Government Response
Joe Shalam, the CSJ’s policy director and a former DWP special advisor, was critical of the decision. "Everyone can see the system is failing," he said. "Abandoning proper welfare reform while costs surge is a political choice with a £27 billion bill attached. 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."
The opposition was quick to respond. Conservative Party Shadow Chancellor Sir Mel Stride accused Labour of "planning for failure" by not making welfare savings. "Taxes are going up to pay for higher welfare spending, thanks to Labour’s weak leadership," he stated. He added that the Conservatives have proposed reforms which they claim would reduce the benefits bill by £23 billion.
In defence of its position, a spokesperson for the DWP said: "We want a welfare state that is there for those who need it and supports people into work, while delivering fairness to the taxpayer. That’s why we’ve launched the Timms Review to make sure PIP is fair and fit for the future. We’re shifting our focus from welfare to work, skills and opportunities so more people can move out of poverty and into good, secure jobs as part of the plan for change."
