Upcoming British Election May Determine Welfare State's Fate

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One month from today, British voters will go to the polls. Conservative Prime Minister David Cameron leads the current coalition government. He wants another term in office. His rival is Labor Party Leader Ed Miliband. But no matter who wins, this election could mean cuts to the British welfare state. NPR's Ari Shapiro reports from London.

ARI SHAPIRO, BYLINE: This center in West London provides services for homeless people - showers, food, counseling. A few years ago, about 80 people came here each day. The numbers started to grow, and now the center limits its services to a hundred people a day, even though 130 or more often show up looking for help. Lorraine Johnson works here.

LORRAINE JOHNSON: You know, we're seeing more women living on the streets. We're having more people coming to us with children, people that are desperate; families in situations that have no food.

SHAPIRO: Britain has cut its welfare budget steadily over the last five years. Johnson says that translates directly to her front door.

JOHNSON: Definitely within the last year or so we've really seen a massive impact. People who were housed are now becoming homeless again.

SHAPIRO: When the financial crisis hit in 2008, the U.S. used a stimulus program - government spending - to boost the economy. Britain chose the path of austerity - cutting government spending, including public services. Now the question is what will happen after voters go to the polls next month. Duncan O'Leary studies these trends at the London think tank Demos.

DUNCAN O'LEARY: The election, I think, will make quite a big difference to what happens to the U.K.'s welfare state in the next five years.

SHAPIRO: This election is not a choice between growing the social safety net or shrinking it. Both parties want to make cuts. It's just a question of how deep those cuts will be. The divide might sound familiar to people who follow American politics. At a debate last week, Prime Minister David Cameron said he wants to balance the books without raising taxes.

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DAVID CAMERON: What is the alternative to making reductions on welfare? It is putting up taxes and cutting people's pay.

UNIDENTIFIED WOMAN: But wait - let us explain - no - just...

CAMERON: I don't want to see that happen.

SHAPIRO: Labor leader Ed Miliband argues for a mix of tax hikes and spending cuts.

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ED MILIBAND: Cuts will have to come, but we can do it in a balanced way. We can do it in a fair way.

SHAPIRO: Either way, Duncan O'Leary, at Demos, says people in Britain will feel the changes that lie ahead, even if they did not notice any changes over the last five years of cuts.

O'LEARY: Some people give the analogy of giving blood. If you give blood once, your body can cope with it. If you give it again, it tires you out a lot more. And I think you could make the same analogy with spending cuts as well. There are certain efficiencies or reductions in spending that you can make once, but make them again and again, it becomes a lot harder.

SHAPIRO: Political leaders believe the current system is simply unsustainable. Sheila Lawlor directs the think tank Politeia.

SHEILA LAWLOR: What we've seen in the last 20 years, 30 years, is the growth of huge levels of people for whom the state has become the breadwinner. It provides housing. It provides a weekly income, as well as providing those universal benefits, like health care and education. And something is going to give.

SHAPIRO: This transformation could make Britain a lot more like the United States, says economist John Van Reenen. He directs the Center for Economic Performance at the London School of Economics. People will have to pay more for services, he says, and there may be less help for those who need it.

JOHN VAN REENEN: If that actually goes ahead, I don't think people have really thought about what that will mean for service provision. So I think it will actually mean quite a different way of providing the kind of services that people have been used to.

SHAPIRO: But it's worth remembering one more way the U.K. is like the US - politicians here don't always keep their campaign promises, especially when it comes to cutting spending. Ari Shapiro, NPR News, London. Transcript provided by NPR, Copyright NPR.