Labour government announces cuts to welfare and public sector jobs

Labour officials have announced multi-billion-pound cuts to welfare while prioritizing investments in defense and armament

March 13, 2025 by Ana Vračar
Prime Minister Keir Starmer gives speech in Hull, March 13, 2025. Source: Lauren Hurley/No 10 Downing Street, Flickr

Keir Starmer’s Labour government is planning multi-billion-pound cuts to the social security system while announcing major investments in defense, causing disbelief and anger among party members and the public. Government plans include at least £6 billion (USD 7.7 billion) in welfare cuts, including reductions in support for people with disabilities. However, some analysts warn that the total figure could be significantly higher, reaching up to £9 billion (USD 11.5 billion) per year by 2029-2030.

Read more: Labour turns to the right while chasing Reform

Government officials, including Starmer, have attempted to justify the cuts on “moral” grounds, arguing that reducing state support would push more people into employment. In his public appearances, Starmer has repeatedly invoked Labour’s commitment to workers and the working class—yet he has failed to make the connection between poor working conditions, declining public health, and previous neoliberal policies that have contributed to the growing number of people unable to work in Britain.

In reality, the new cuts are not designed to ensure more people can find decent, dignified jobs but to satisfy the British Treasury’s self-imposed fiscal rules. This has sparked an avalanche of criticism, with many urging the government to pursue alternative solutions, most notably a wealth tax on the super-rich. “This government has plenty of ways to raise the money it needs to provide vital services, and yet they seem unwilling to confront those trade-offs—instead crossing fingers for growth and reflexing to austerity,” said Hannah Peaker of the New Economics Foundation in early March.

Dismay is widespread among Labour members as well, with reports suggesting that government officials were surprised by the scale of the backlash. In response, parliamentarians have been called in for group consultations with Starmer’s cabinet—but not all were welcome. Some of the more outspoken left-leaning MPs claim they were excluded from discussions until now. Others, like Richard Burgon, have used parliamentary debates to call for a decisive reversal of the measures. Similar concerns have been raised by independent MPs: “This government could target the super-rich by introducing a wealth tax. Slashing disability benefits would be a cruel political choice to go after the most vulnerable people in society instead.”

Read more: Campaigners in the UK say get Palantir out of the NHS

In a separate but linked cost-cutting decision, the British government announced the abolition of NHS England, the agency responsible for administering the English branch of the National Health Service (NHS). Reforms imposed on the organization are expected to halve NHS England’s 13,000 workforce and formally link its functions to the Department of Health—which itself has not been spared from restructuring under Health Secretary Wes Streeting.

While Starmer claims that savings from abolishing NHS England will be redirected toward hiring more nurses and frontline healthcare workers, trade union officials have warned that, without responsible planning, the plan could backfire, increasing administrative burdens on NHS staff and complicating the supply of essential medical supplies. Although they acknowledge that the NHS is in crisis due to decades of austerity and privatization, trade unions and social justice campaigners have criticized Starmer for paying lip service to Labour’s historical commitment to workers while failing to recognize that thousands of civil servants are workers too. They argue that any plan to strengthen health services in Britain should prioritize people’s well-being over cutting costs.