The Conservative Party has unveiled plans to restrict how benefit claimants spend their welfare payments using a dedicated spending card.
Under the proposed crackdown, unemployed people on benefits would see their payments reduced by 30 per cent if they remain out of work.
Those on Universal Credit for more than six months and judged fit to work would receive what the party calls a Subsistence Allowance, set at 70 per cent of the full claimant rate.
The ‘Back to Work’ card would block purchases of alcohol, cigarettes, and betting products, as well as preventing cash withdrawals entirely.
The scheme draws on a similar model used in Australia, where debit cards for some benefit claimants cannot be used to withdraw cash or buy alcohol.
Claimants who have worked for two years would be entitled to one full year on the standard Universal Credit rate before any reduction applies.
The Conservatives said the plan would not affect sick or disabled people, nor those already in employment, as they are exempt from the Subsistence Allowance.
According to Conservative Party analysis, the proposal would save taxpayers £538 million a year if implemented.
Tory leader Kemi Badenoch said she would be “tough on those who exploit the system because the current system is unfair to workers, taxpayers and those who truly need support.”
Badenoch added: “Some will say this is unfair on people claiming benefits. What is unfair is a system where someone who can work chooses not to, and earns more from benefits than someone in a job.”
She went further, stating: “We should not be borrowing from our children and grandchildren to support people who simply refuse to work. Welfare must be a safety net for those who genuinely need it, not a lifestyle choice for those who can’t be bothered.”
The proposal sits alongside other welfare reforms the Conservatives have backed, including scrapping disability payments for low-level mental health conditions and restoring the two-child benefit cap.
Reform UK’s Robert Jenrick dismissed the plan as “so weak the Lib Dems could have authored it,” arguing it fell far short of the scale of reform needed.
Reform UK has pledged to cut the welfare bill by over £50 billion, compared to the Conservative target of around £23 billion in reductions.
Jenrick said: “The Tories left more people on long-term benefits and benefit fraud at record levels. Now they offer a spending card that won’t even put a dent in the coming £400 billion bill. It’s a sticking plaster on a wound they opened.”
A Labour Party spokesperson also attacked the proposal, saying: “The Conservatives had 14 years to fix our welfare system but they completely failed to make meaningful reforms.”
Labour added that the card scheme was “unworkable” and did “nothing to tackle the numbers of people their system left signed off and written off.”