LONDON (March 18) – Britain’s Labour government is set to announce plans on Tuesday to reduce spending on disability and long-term health benefits, aiming to rein in a rapidly increasing welfare budget despite opposition from some party lawmakers.

The cuts come ahead of the March 26 fiscal statement, a key moment when Labour’s pre-election pledges to limit tax hikes and control borrowing will be tested against slower-than-expected economic growth and lower tax revenues.

Ministers are exploring all possible measures to boost growth and cut spending, striving to meet a self-imposed fiscal target of balancing day-to-day public spending with tax revenues by the end of the decade.

The welfare budget, which already surpasses the country’s defense budget and is projected to exceed £100 billion (US$129 billion or RM573.4 billion) by 2030, is expected to bear a significant portion of the reductions.

“I don’t think anyone believes the current system is working,” Finance Minister Rachel Reeves told Reuters on Monday.

“It’s not working for people on benefits, who often find themselves trapped rather than receiving the support needed to return to work. At the same time, it’s not working for taxpayers.”

Details of the changes will be presented in Parliament later today.

Reports indicating that £6 billion in cuts could be implemented have raised concerns within the Labour Party, which secured a landslide victory last year on a manifesto promising a decade of renewal.

Last year, a decision to reduce winter fuel payments for some pension-age Britons sparked internal party tensions.

Prime Minister Keir Starmer’s government has rejected claims that it is repeating the austerity measures introduced by a Conservative-led government after the global financial crisis—an approach Labour argues contributed to Britain’s long-term economic struggles.