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The Department for Work and Pensions’ decision to reverse planned welfare cuts could result in taxpayers paying an extra £580 each by 2030, according to a new analysis by the Centre for Social Justice (CSJ).
The warning follows the Labour government’s move to cancel reforms to Personal Independence Payments (PIP) and the health-related component of Universal Credit.
The CSJ estimates that spending on disability-related benefits will rise sharply from £49.6 billion to £72.3 billion over the next six years. With around 39.1 million taxpayers, this £22.7 billion increase will place a significant financial burden on households nationwide.
The think tank noted that the same amount of money could instead fund a 3p reduction in income tax, still leaving £5 billion spare.
Joe Shalam, the CSJ’s policy director and a former DWP adviser, warned that the welfare system is “failing” and that the government’s decision to halt reform is a “political choice with a £27 billion bill attached.” He said the move not only costs taxpayers more but risks trapping “a lost generation” on benefits without a path back to work.
Conservative Shadow Chancellor Sir Mel Stride accused Labour of “planning for failure” by avoiding welfare savings. He argued that rising taxes are being used to fund higher welfare spending, calling for “urgent reform” to curb the growing number of people on long-term benefits.
Stride said the Conservatives’ proposed reforms could cut the welfare bill by £23 billion, helping prevent tax rises and “get Britain working again.”
A DWP spokesperson responded that the government is committed to a welfare system that “supports those who need it” while promoting fairness to taxpayers. They highlighted the Timms Review, aimed at ensuring PIP remains fair and sustainable, and stressed Labour’s focus on moving people from “welfare to work, skills, and opportunities” as part of their broader plan for change.
