Last Updated on February 27, 2025 by Karl Thompson
Recent figures (1) show that 3.3 million working-age adults in Britain are receiving incapacity benefit, 700,000 more than before Covid. Of these, 2.4 million are claiming these higher rates of benefit for mental illness – 900,000 in 2024. The total health-related bill was put at close to-£66bn, due to reach £100bn in a decade’s time.
A 30 year old today is twice as likely to claim disability benefits as their equivalent 20 years ago.
Another recent study (2) found that 63 000 people aged 16-24 went straight from study to claiming long-term sickness benefits.
There is little evidence that the Government’s post-pandemic welfare strategy is delivering. In the last month, the number of individuals transitioning off incapacity benefit into employment dropped to its lowest point since the initial lockdown in 2020.
The National Institute of Economic and Social Research discovered that although 21% of incapacity benefit claimants in early 2021 had secured employment by June 2022, the figure had since dropped back to 14% – and the pipeline is diminishing.
The Institute for Fiscal Studies (3) has established that in the previous year, the rate of successful health-related benefit claims rose from 45% to 65% – suggesting the Government has “relaxed its approach to making claims.”
In January 2025 , the cross-party Lords report demanded root-and-branch reforms to the system: in the long term, merging sickness benefits and universal credit; in the short term, increasing the number of personnel dedicated to dealing with claims. In Covid Britain, fewer working-age individuals are in work and the cost of benefits is increasing sharply.
The next big battle in Whitehall is how far, and how fast, to push for reform – not just for the sake of the public finances, but because for too long we’ve parked hundreds of thousands of people on the benefits system”.
A Marxist Analysis of the ‘war on sickness benefits’
From a Marxist viewpoint, the rising sickness benefit claims and mounting fiscal burden reveal deeper structural contradictions in capitalist societies. Marxist theory argues that welfare provisions are designed less to liberate the working class and more to pacify it, ensuring a steady surplus labor force for capitalists. The figures—3.3 million working-age adults on incapacity benefit, with many citing mental illness—highlight systemic exploitation and alienation. Poor working conditions, job insecurity, and labor commodification leave many unfit for sustained employment.
The trend of 63,000 young adults aged 16–24 moving directly from study to long-term claims underscores a crisis in labor reproduction, forcing more people into dependency on state support. Proposed reforms, such as merging sickness benefits with universal credit and increasing staff, are seen not as solutions to exploitation but as measures to control the workforce. As discussed in Marxist Perspective on Society and Marxist Perspectives on the Welfare State, these reforms may stabilize a system that maintains worker dependency without challenging the capitalist mode of production.
A Neoliberal Analysis
Neoliberal thinkers interpret the surge in sickness benefit claims through the lens of individual responsibility, market efficiency, and fiscal prudence. They argue that the increase in claims and the resulting fiscal strain expose inefficiencies in an overextended welfare state. Neoliberals contend that generous benefits foster a ‘dependency culture,’ reducing incentives for employment and productivity.
The drop in claimants transitioning into work—from 21% to 14%—reinforces the view that current policies discourage labor participation. The relaxed approach to health-related claims, rising from 45% to 65%, further supports the argument for tighter controls. As detailed in Neoliberalism and Social Welfare Policies Neoliberals advocate reforms like closer integration of sickness benefits with universal credit and enhanced administrative oversight to reduce state expenditure, promote self-reliance, and restore market discipline. T
his perspective is outlined in Neoliberalism New Right Introduction, where reforms aim to reintroduce competition and efficiency into the welfare system.
A Third Way Analysis
The Third Way occupies a middle ground between Marxist and neoliberal approaches. Proponents acknowledge the need for a robust safety net while stressing individual initiative and market responsiveness. They argue that reforms should integrate support with active labor market policies, ensuring benefits assist claimants without fostering long-term dependency.
This perspective recommends personalized benefit management alongside job-placement initiatives and retraining programs to facilitate a smoother transition back into work. As detailed in Middle Way Perspectives on the Welfare State, this balanced approach reconciles social solidarity with economic efficiency. By addressing structural issues that lead to long-term dependency while maintaining fiscal discipline, the Third Way offers a pragmatic path forward.
Conclusion
In summary, the debate over reforming UK sickness benefits is multifaceted. Marxist analysis views the system as a tool for managing exploited labor, neoliberal thought pushes for tighter controls to reduce dependency and boost efficiency, while the Third Way seeks to blend robust social support with active labor market policies for a balanced solution.
Sources
Department of Work and Pensions (2025) Decomposition of growth in the number of claimants of Universal Credit with Limited Capability for Work and Work-Related Activity, or in the Employment and Support Allowance Support Group.
NHS Confederation (2024) “Improving our Nation’s Health: A Whole-of-Government Approach to Tackling the Causes of Long-Term Sickness and Economic Inactivity”,
Institute for Fiscal Studies (2024) Health-related benefit claims post-pandemic: UK trends and global context.
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