Welfare Reform: British Style

Rachel Sheffield / November 19, 2010

According to British Chancellor of the Exchequer George Osborne, the United Kingdom will put into place “a radical new welfare state where it always pays to work.” Newly elected British Prime Minister David Cameron has set forth plans that, according to analysts, will result in the nation’s most dramatic welfare reform since World War II.

Wracked with debt, the U.K. is attempting to whittle down their government’s largest expense—welfare—which today stands at approximately $350 billion, or 15 percent of the nation’s GDP. Currently, 5 million British citizens receive welfare, and approximately1.4 million of those have been on welfare for over nine years.

While reining in government spending is certainly a major impetus behind the reform, it’s not the only reason. Similar to the United States’ 1996 reforms, Britain is attempting to promote the philosophy that, as Deputy Prime Minister Nick Clegg put it, welfare should “not … compensate the poor for their predicament” but instead “act as an engine of mobility.” Britain’s reforms consist of several elements: (more…)