We Can’t Afford to Cut Welfare. The Economy Depends on It!
Dr. Adam North reacts to Labour's decision to cut welfare for the disabled.
The Labour government has recently come under scrutiny for their decision to cut welfare for some of the UK’s most vulnerable groups. The question I want to address here is why they are doing this when it’s not in our moral or economic interest? Phillip Inman has already written about this in The Guardian and here I want to add to the discussion.
The idea of a welfare safety net is often framed as a moral or political choice: a compassionate gesture, a policy of last resort, or a burden on the economy. But this framing misses a deeper truth. A well-designed welfare system isn’t just an ethical decision to protect societies most vulnerable; it’s one of the most important systems for building long-term stability, increasing economic productivity, and creating social cohesion. Crucially, to achieve these outcomes, it must be built not for short-term fixes, but with long-term planning in mind.
1. Welfare Is Not Charity—It’s Infrastructure
At its core, a welfare safety net protects people from falling into severe poverty when life becomes unpredictable—whether due to illness, unemployment, disability, or family breakdown. But more than that, it creates the conditions under which individuals can meaningfully participate in society. When people know they won’t be left destitute if they are fired from their job or undergo a health crisis, they are freer to take risks, retrain for new industries, raise families, and contribute to their communities.
This isn’t charity—it’s vital infrastructure for maintaining a highly developed economy. Just as we invest in roads and electricity because they enable growth, a functioning welfare system provides the social infrastructure that allows individuals and economies to thrive together.
2. The Short-Term Mentality Problem
Despite this, welfare policy is too often subject to short-term political thinking. It’s slashed in the name of "efficiency" or redesigned to address the optics of individual fraud, rather than systemic outcomes. But cutting support often creates hidden costs that manifest later. When people fall through the cracks of inadequate welfare, they reappear in other, more expensive systems, like emergency healthcare, homelessness services, the criminal justice system.
Some people will shout “just get another job”, but in many cases this simply isn’t an option, and a welfare system is important to provide time for workers to redirect their livelihoods without losing everything they’ve built.
A short-term approach might balance a budget this year, but it passes the bill on to future generations—economically and socially. This is what many governments, including in the UK, have been doing since the 1980s. Long-term planning would instead ask: what kind of society are we building ten, twenty, or thirty years from now?
3. Long-Term Benefits: Health, Education, Productivity
The evidence is clear that strong, stable welfare programs yield measurable long-term benefits:
Health outcomes improve, reducing the burden on the NHS. Poverty is a major social determinant of poor physical and mental health.
Educational attainment increases when specific welfare policies are implemented to ensure that children grow up in financially stable homes, improving future workforce readiness and innovation capacity.
Labour market participation rises when welfare provides a bridge rather than a trap—helping people transition through difficult periods without being permanently sidelined.
Nordic countries, often mentioned for their generous welfare systems, consistently rank among the most prosperous and socially mobile nations in the world. They demonstrate what happens when social protection is treated as a pillar of national success, not a reluctant cost.
4. Resilience in an Uncertain World
The COVID-19 pandemic made one fact impossible to ignore: life is unpredictable, and entire systems can be disrupted overnight. A strong welfare net offers society resilience. It means we can respond to shocks not with panic, but with confidence, knowing that our basic needs will be met, and recovery will not be derailed by mass destitution.
However, when crises are met, those with the strongest shoulders should make sacrifices to protect their neighbours and countrymen. Instead, the COVID pandemic was one of the largest transfer of wealth from the people to the ultra-rich ever. Studies have shown that extreme wealth decreases compassion, and it’s clear that the ultra-rich have no empathy for the average worker.
Climate change, automation, demographic shifts are not just future concerns, but active pressures on our labour market and social structures. Any serious long-term plan must include the capacity to support people through these transformations, and these long-term solutions should not bankrupt the country.
5. Inequality Undermines Prosperity
We’re told the country can’t afford welfare, even as wealth inequality continue to soar. But refusing to invest in people while protecting the ultra-wealthy doesn’t just erode fairness—it erodes the foundations of a functioning society.
Even a conservative wealth tax on the top 0.1% could raise enough to substantial expand the welfare system and increase the UK’s economic prospects.
Conclusion: A Matter of Design and Vision
The question is not whether we can afford a strong welfare state—but whether we can afford not to have one. When designed with long-term outcomes in mind, welfare becomes not a reactive patchwork, but a generational investment in a more equitable, prosperous, and cohesive society.
Short-termism in welfare policy is like underfunding education or neglecting infrastructure maintenance. The costs don’t disappear; they just show up later, multiplied. What we need now is the political will to build a system that reflects what we owe not just to each other today, but to the future we all have to live in.
