United Kingdom Prime Minister Keir Starmer has unveiled a major shake-up of the country’s welfare system, arguing that it could save the country 5 billion pounds ($6.48bn) a year by 2030, but sparked a political row in the process.

In particular, the government is cutting health and disability benefits by making it harder for people with less severe conditions to receive government support.

Starmer is facing angry opposition from charities, think tanks and even senior members of his own Labour Party over the moves announced this week.

The prime minister and Chancellor Rachel Reeves argued that they are being forced to make cuts to spending after inheriting a dire financial position from the previous Conservative government, which ruled for 14 years under various prime ministers until the general election in July.

The UK government runs a hefty deficit, meaning it has to borrow from financial markets every month to fund spending.

However, Starmer’s critics said these cuts target the most vulnerable people in society and argued that the Labour Party, founded in 1900 from the trade union movement, has lost its sense of purpose.

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Colum Eastwood, an MP from Labour’s sister party, the Social Democratic and Labour Party, in Northern Ireland, referred to the case of a constituent who will lose financial support under the reforms and asked parliament on Wednesday: “What is the point of Labour?”

Since the COVID-19 pandemic, the cost of sickness and disability benefits has soared in the UK as large numbers of people say they are unable to work and are in need of state assistance to live. Experts said they do not yet know if this is a direct result of people being diagnosed with long COVID, but during the pandemic, it became easier for people to apply for benefits without being assessed in person.

Reeves is expected to introduce more cuts to government spending in her spring statement to parliament next week.

Which welfare benefits is the UK government cutting?

The majority of the 5 billion pounds in savings will come from tightening the rules on applying for PIP – personal independence payments that are paid to people with disabilities or long-term illnesses.

The benefit comprises a daily living element and a mobility component. PIP is currently paid to 3.6 million people who score from zero to 12 on their ability to perform tasks such as preparing food and getting dressed. The higher the score, the more support is offered.

From November 2026, people will need to score a minimum of four points in at least one activity to qualify for the daily living element. Things that score below four points include needing to be reminded to prepare food, help with showering or washing and dressing the lower body, and needing help to engage with other people.

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Under the stricter rules, people receiving PIP also will be reassessed more frequently.

PIP payments are typically about 100 pounds ($130) a week and can still be paid to people who are working.

The government’s Health and Disability Green Paper will boost Universal Credit (UC) support for up to four million families without any health conditions or disabilities by about 3 pounds ($3.90) a week, but that is a small part of the wider plan.

How many people will be affected?

Starmer told parliament that the fact that 2.8 million working-age people are not working due to long-term sickness is a “damning indictment” of his predecessors.

Resolution Foundation, a centre-left think tank, said if the government plans to save 5 billion pounds from restricting PIP by making it harder to qualify for the “daily living” component, this would mean 800,000 to 1.2 million people losing support of 4,200 pounds ($5,450) to 6,300 pounds ($8,170) per year by 2029-2030.

“With seven in 10 PIP claimants living in families in the poorest half of the income distribution, these losses will be heavily concentrated among lower-income households. This looks like a short-term ‘scored’ savings exercise rather than a long-term reform,” Resolution said.

What is the rationale for these cuts?

Since the pandemic, spending on health and disability benefits has soared in the UK. Benefits now cost 65 billion pounds ($84bn) a year and are projected to rise to 100 billion pounds ($130bn) a year by 2029. That is more than the UK spends on defence.

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Labour says it wants to be a party for people who work and to encourage as many people as possible to do so.

Work and Pensions Minister Stephen Timms said the reforms will also lead to savings that will protect welfare in the long term.

“We do think we’ve now made the system sustainable, and we’re committed to maintaining it,” he added.

How have critics of the cuts responded?

The opposition Conservative Party said the cuts are merely “rushed” attempts to make government finances look better in the short term and the welfare system needs a wider overhaul that it estimated could save 12 billion pounds ($16bn) a year.

Advocacy groups voiced anger at the cuts. The Disability Benefits Consortium, which represents more than 100 charities, said: “These immoral and devastating benefits cuts will push more disabled people into poverty and worsen people’s health.”

Richard Burgon, MP for Leeds East, wrote on X: “The Government must drop this cruel proposal or it’ll face the mother of all rebellions.”

Work and Pensions Select Committee Chairwoman Debbie Abrahams, a Labour MP, said there were “more compassionate” ways to balance the books “rather than on the back of sick and disabled people”.

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What will the economic impact of the cuts be?

The government hopes that making these cuts would enable it to reduce borrowing, freeing up money for other things. This move follows the one cutting winter fuel payments for some pensioners last year.

Labour hopes that by making such controversial moves early in its term of office, it will have enough time to boost the economy and impress voters before the next elections, likely in 2029.

Russ Mould, investment director at stockbroker AJ Bell, said: “Rachel Reeves will be hoping that she is judged on the basis of the economy’s performance across the whole term of this parliament, and not just the first few months of this Labour administration.

“The next election is not due until August 2029 at the latest, and it makes sense for the chancellor to try and get the bad news out of the way now in the hope that the economic picture looks a lot brighter by the time the voters go back to the ballot box.”

Will cuts to public spending heal the UK economy?

The Organisation for Economic Co-operation and Development (OECD) has cut forecasts for the UK due to sluggish growth lately. But the OECD also suggested that the UK would feel the effects of “increased geopolitical and policy uncertainty weighing on investment and household spending”.

It expects United States President Donald Trump’s new tariffs to create a less favourable global and domestic environment for the UK.

The savings generated by these cuts to welfare payments amount to far less than 1 percent of gross domestic product (GDP), economists said. They added that the biggest problem for the UK is that it has been struggling for economic growth in the first place.

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Paul Dales, chief UK economist of Capital Economics in London, said: “The cuts will reduce total government spending by about 0.15 percent of GDP. We’re expecting cuts to departmental spending of a further 0.15 percent of GDP or so to be announced in the chancellor’s fiscal update on March 26. This is a tightening of fiscal policy relative to previous plans. It would reduce GDP by 2029-2030 by 0.3 percent. That’s not a very big change spread over four and a half years. But it doesn’t help when GDP growth is so low.”

Reeves has said more and deeper changes will be required to turn around government finances. “I don’t think anyone believes that the current system is working,” she told the Reuters news agency. “It’s not working for people on benefits, who are often trapped on benefits rather than getting the support they need to get back into work, … and at the same time, it’s not working for taxpayers.”