Key facts
- Welfare spending increase projected to slightly exceed revenue from frozen tax thresholds.
- Spending on working-age, disability, and child benefits to rise by £33.4 billion by 2031-32.
- Freezing tax thresholds expected to raise £33.1 billion in the same period.
- Sickness and disability benefits alone may exceed £100 billion annually before 2030.
- Higher marginal tax rates could reduce labor supply by the equivalent of 215,000 workers by 2030-31.
The Centre for Social Justice (CSJ) has stated that a projected £33.4 billion increase in welfare spending between 2026-27 and 2031-32 will slightly outweigh the £33.1 billion expected to be raised by freezing tax thresholds over the same period. The think tank criticized the government's approach as a "fudge-it Budget," arguing that difficult decisions to tackle the welfare crisis have been postponed. Annual spending on sickness and disability benefits alone is forecast to surpass £100 billion before the end of the decade. The CSJ also noted that higher marginal tax rates resulting from the freeze could reduce labor supply by the equivalent of 215,000 workers by 2030-31.