Chancellor of the Exchequer Jeremy Hunt indicated that reforms to the UK state pension and welfare benefits are being considered as the government scrambles to fund increases in defense spending and boost economic growth.

Testifying to lawmakers in the House of Lords, Hunt said the triple lock — which guarantees that the state pension rises by the highest of inflation, average earnings or 2.5% — was “under review.”

Continuation of the policy is subject to improving the government’s two goals of raising public sector productivity and increasing the annual rate of GDP growth, Hunt said. He added that further changes to the benefits system are needed, particularly among those who signed off work with mental health problems.

“We do need to keep looking at welfare reform because it is incredibly destructive to society if, inadvertently and for all the right reasons, a system ends up parking people outside the world of work,” Hunt said Tuesday at a hearing of the Lords’ economic affairs committee.

In his budget earlier this month, the Chancellor gave workers a £10 billion ($12.7 billion) tax cut. He is increasingly expected to release another major fiscal statement before the general election, which he hinted could be held in October — a date he volunteered to lawmakers without being prompted.

The ruling Conservative party is lagging well behind the Labour opposition in the polls despite £20 billion of tax cuts for workers over the last two fiscal statements, and lawmakers in the ruling party are getting restless. Hunt said little about his tax plans but stressed that defense spending needed to rise to 2.5% from 2% “as soon as it is affordable.” An increase of that scale would cost around £12 billion a year.

To raise the funds, Hunt suggested he could curtail the generosity of the state pension and benefits. The Organization for Economic Cooperation and Development, a Paris-based research institution, has suggested the UK Treasury could save billions of pounds by replacing the triple lock with an average of inflation and wage growth.

Welfare costs have been spiraling upwards as more people drop out of work and on to benefits, with mental health conditions now a major contributor. Last year, the Office for Budget Responsibility calculated that the deteriorating health is costing the state £15.7 billion cost in lost taxes and higher welfare.

“One of the particular challenges we have at the moment is that the welfare system identifies mental health challenges as a reason why someone should not be asked to look for work,” Hunt said.

“There will be cases when not being in the workplace is detrimental to people’s mental health and it will be much better if those individuals were supported to live with their mental health conditions in a way that allows them to work. That is a very big change.”

“When it comes to welfare there are some very particular issues that we need to keep thinking about how we can reform.”

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