Conservatives propose restricted welfare card for long-term unemployed

Some long-term unemployed people would be prevented from using benefit payments to buy alcohol, cigarettes or gambling products under plans announced by the Conservatives.

People claiming Universal Credit while looking for work would initially receive their full entitlement for six months. After that, claimants without a sufficient history of working and paying taxes would have their standard allowance reduced by a third.

The remaining payment would be placed on a prepaid “back-to-work” card that could be used for food, bills and other essentials but not alcohol, tobacco or gambling. Cash withdrawals would also be blocked.

Under the proposals, every two years spent in work would entitle a claimant to another year of full payments. People who are disabled, unable to work because of illness or receiving Universal Credit while employed would be exempt.

The Conservatives estimate that about 350,000 claimants would move onto the reduced “subsistence allowance”, saving taxpayers £538 million a year. Party leader Kemi Badenoch said the changes would make the system fairer to people who work and contribute.

Labour described the proposed card scheme as unworkable and said its own approach included a £3.5 billion employment support programme. Anti-poverty campaigners have also warned that reducing payments could push more people into hardship, while Reform UK argued that the plans would make little difference to the overall welfare bill.

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