The Conservatives have promised to stop long-term jobless benefit claimants spending welfare payments on alcohol, cigarettes and gambling. Claimants unemployed for over six months could see Universal Credit cut by 30%, with the reduced payment going onto a “Back to Work” card that forbids cash withdrawals or purchases of restricted items.
The party says the scheme aims to push people back into work and trim the rising welfare bill. Labour calls it “unworkable”.
The Card Scheme
Under the plans, claimants who have been out of work for six months or more would have their Universal Credit reduced by 30%. That reduced payment would be loaded onto the “Back to Work” card, which the Tories say would prevent cash withdrawals and purchases of restricted items.
Fit claimants get six months on full benefits before the credit drops. Every two years of prior work buys one extra year of full credit, but non-contributors fall to a 70% “Subsistence Allowance”. The party says this protects claimants with a strong work record.
A 58-year-old who has worked since leaving school but lost their job would keep full credit until state pension age. Sick, disabled or working claimants are exempt; only those judged capable of work are affected.
What the Card Can Buy
The restricted items include alcohol, cigarettes and gambling. The card forbids cash withdrawals, meaning claimants could not simply take the money out and spend it freely.
The Tories say this stops welfare payments being used for things that do not help people find work. They argue the current system rewards people for staying out of work.
The Cost of the Change
The Tories estimate the changes would move about 350,000 claimants onto the lower credit rate, saving around £538m a year. That figure sits alongside a broader picture: welfare spending is forecast to reach £408.6bn by 2030/31.
The party points to record numbers sitting on long-term benefits as evidence of the problem. But critics say the card scheme does nothing to address the underlying reasons people lose their jobs in the first place.
Kemi Badenoch’s Case
Kemi Badenoch, Conservative leader, made the case directly. She said the current system where someone who can work earns more in benefits than someone employed is “unfair”.
She added: “Welfare must be a safety net for those who genuinely need it, not a lifestyle choice for those who can’t be bothered.”
Labour’s Response
Labour is not impressed. A Labour Party spokesperson said the Tories had 14 years to fix the welfare system and failed to make real changes, now proposing an unworkable card scheme that does nothing to address the people their system left behind.
The party’s argument is simple: the scheme is unworkable.
Trussell Trust Pushback
Helen Barnard, director of policy and research at the anti-poverty charity Trussell, called the proposals “deeply misguided”. She noted that Universal Credit already falls short of food and heating needs and forces people to food banks.
Barnard said the hardship damages health and undermines work prospects.
The Broader Agenda
The card scheme is part of a wider package. The Tories also want to scrap Personal Independence Payment for low-level mental health conditions to cut the welfare bill, and tighten sickness benefit rules, saying that would force more people to look for work.
Reform UK’s economy spokesman Robert Jenrick said record numbers sit on long-term benefits and the proposals “won’t even put a dent” in the welfare bill.
Andy Burnham’s Promise
Prime Minister Andy Burnham insists he will reduce welfare costs without “crude cuts”, targeting young people not in education, employment or training.
The contrast between the two approaches is stark. The Tories want to restrict what people can buy with their money; Burnham wants to reduce demand by changing who gets paid.
A Comparison of the Two Approaches
| Approach | Focus | Goal |
|---|---|---|
| Tories | Restrict spending | Force people back into work |
| Burnham | Reduce demand | Cut welfare costs |
The source material ends there. No further verdict is offered, and no judgment about whether the scheme will work in practice is stated.
Where the paper stands
The paper backs no new tax on the wealthy funding this card scheme and is against a welfare budget that nobody voted on line by line. The scheme’s savings come from cutting benefits for people the government says can work, but they do not address the reasons people lose their jobs in the first place. The paper wants taxpayers to have real control over where public money goes, not a budget that operates without their say.
The scheme targets claimants who have been out of work for six months or more, reducing their Universal Credit by 30% and loading it onto a card that forbids cash withdrawals and purchases of restricted items. The card itself is designed to stop welfare payments being used for things that do not help people find work, which the Tories argue the current system rewards people for staying out of work.
The paper would prefer a system where people facing unemployment get direct support tied to finding work, rather than restrictions on how they spend what little money they have left. The Trussell Trust’s point about Universal Credit already falling short of food and heating needs holds: hardship damages health and undermines work prospects. The paper wants any welfare plan to start from that reality, not from a card scheme that treats poverty as a choice.
Source material: “Tories would stop long-term jobless using benefits to buy alcohol and cigarettes,” the BBC.
Get the Notebook.
The day's best stories and every fresh verdict, in plain English, in your inbox by seven. One email a day, no more.