The Conservative Party has announced a pledge to restrict Universal Credit payments for individuals who have been unemployed for more than six months, prohibiting the use of funds for alcohol, cigarettes, and gambling. Under the proposed framework, eligible claimants who lack a sufficient prior work history would see their benefits reduced by 30%.
This reduced rate, designated as a “Subsistence Allowance,” would be issued via a specialized “Back to Work” pre-paid card. The card would be configured to block cash withdrawals and prevent transactions at retailers selling restricted goods. Party officials stated the initiative aims to incentivize re-employment and curb the rising cost of the welfare system.
Labour responded sharply to the announcement, labeling the scheme “unworkable.” A spokesperson for the opposition noted that the Conservatives had fourteen years to implement meaningful reforms, arguing that the new card system fails to address the structural issues left by their previous tenure.
According to Conservative estimates, the changes would impact approximately 350,000 claimants, generating annual savings of roughly £538 million. The policy introduces a time-limit mechanism: individuals fit for work would initially receive full benefits for six months. For every two years of previous employment, an additional year of full-rate support would be granted. However, those deemed to have insufficient contribution records would fall onto the lower allowance.
Party leadership emphasized protections for those with robust employment histories. For instance, a 58-year-old who worked continuously since school leaving but became redundant would retain full Universal Credit rates until reaching state pension age. Exemptions would also apply to claimants who are sick, disabled, or currently employed.
Conservative leader Kemi Badenoch criticized the existing structure, describing a scenario where individuals choose not to work yet receive higher benefits than employees as fundamentally unjust. “The best welfare is a well-paid job,” Badenoch said, adding that the party intends to be “tough on those who exploit the system” to ensure fairness for taxpayers and workers.
Charity leaders offered a differing perspective. Helen Barnard, director of policy and research at the Trussell Trust, condemned the plan as “deeply misguided.” She argued that Universal Credit already fails to cover basic necessities like food and heating, driving many toward food banks and damaging their health and employability.
Robert Jenrick, Reform UK’s economy spokesman, also criticized the proposals, asserting that the Conservatives left record numbers of people on long-term benefits and that the new measures would fail to significantly impact the welfare bill. This follows earlier Conservative pledges to scrap Personal Independence Payments for certain mental health conditions and tighten sickness benefit rules.
Department for Work and Pensions figures project that benefit spending will reach £408.6 billion by the 2030/31 fiscal year. Prime Minister Andy Burnham has maintained that while he intends to reduce the welfare bill, he opposes “crude cuts” and plans to focus instead on reducing the number of young people not in education, employment, or training.
Thirty percent cut for long-term unemployed? That’s a harsh disincentive. How does poverty lead to employment?
If UC barely covers food, cutting it further seems cruel. This won’t create jobs, only hunger.