Of all the political debates which Labour have embroiled themselves in since coming into government, welfare reform is one that will continue to rear its ugly head until it is tackled directly. The question that will always be one step behind these conversations is who has the gumption to take it on.
A slowly deteriorating fiscal backdrop of rapidly increasing public borrowing has thrust our current welfare and benefits system under a magnifying glass. The latest figures from the Office of National Statistics show that borrowing in the financial year to November 2025 was 8.2% more than in the same period the year before. The £132.3 billion borrowed over the eight-month period is the second-highest figure on record, only behind the height of the Covid-19 pandemic in 2020. Ballooning public spending has pushed the government into a corner and many are turning to debt in order to fund day-to-day expenditure, with the ONS highlighting increased welfare payments as one of the main drivers of higher costs.
This should come as no surprise, given some of the figures that have emerged on how much welfare is set to dent the public coffers by the end of this decade. The welfare tab is projected to reach a total of £324 billion for 2025-26, a substantial step-up of £44 billion higher compared to 2019-20, due to both upward pressure from the triple lock on the State Pension and a rising number of claimants. One in 10 people of working age are now claiming a sickness or disability benefit, and the number of people receiving the personal independence payment is on course to rise from 2 million to 4.3 million by the end of the decade. This is not an issue that will correct itself over time.
If not addressed, our current welfare and benefits system is set to push public spending beyond any semblance of sustainability. Yet instead of taking action Labour find themselves mired in the weight of their own internal ideological divide and the political baggage of past reforms carried out by the party. As it is, welfare has become a vehicle for point-scoring, rather than problem-solving.
The voices that have stood out in past discussions on this issue are ones that have demonstrated a nous for strong leadership and been unafraid to take on the glaring problems in the system. The late Frank Field, was considered a maverick in the area and remained committed to bridging ideological divides in order to achieve real progress on the welfare state until his death.
Field launched campaigns with Tory MPs to tackle poverty, consistently warning of “benefit dependency” and of the economically unsustainable approach of propping up significant numbers of people on welfare payments, instead advocating for reforms that empowered self-sufficiency and promoted work incentives. He was famously invited by Tony Blair to “think the unthinkable” about welfare reform, prompting Field to restore the contributory principle on top of the basic state pension – admired by industry experts, unfathomable to the government.
Some more contemporary voices in welfare discussions include The Centre for Social Justice and former Conservative leader Iain Duncan Smith MP and Patrick Spencer MP, both outspoken critics of Labour’s stuttering progress on reform and advocates for strong political leadership as a way through the roadblock. During his time as Secretary of State for Work and Pensions from 2010 to 2016, Duncan Smith led the most significant programme of welfare reforms this century, which saw the introduction of Universal Credit, the Work Programme, and the Single Tier Pension. His decisions may have been controversial, but they were the actions of someone who was unafraid to address glaring problems in the system and throw his weight behind changing them.
Does the Labour cabinet have these personalities in their ranks? Wes Streeting is leading the NHS through its bold 10 Year Health Plan, aiming to transform how healthcare is delivered across the country. Shabana Mahmood has trailed similarly far-reaching reforms to the UK’s asylum system. However, both Streeting and Mahmood are working on what is currently safer terrain, given the historic salience of the NHS to voters and the contemporary discussions around immigration driven by Reform. Welfare reform, in contrast, has consistently shown itself to be a long-term issue that falls through the cracks of the interests of modern democracy.
Spending on welfare will reach a crunch point this decade, and the knock-on impacts for public finances are set to be disastrous. Labour would do well to heed the advice of both Field and Duncan Smith, be it “thinking the unthinkable” or laying waste to political hesitations holding them back from effective change. Welfare reform needs a leader, and it is in Labour’s best interests to find one fast.
