The chancellor has warned against allowing Britain's benefits bill to balloon while not offering young people opportunities. John Healey told Labour's annual conference in Liverpool that cutting welfare spending was "more than an economic must - it's a moral duty". "The best thing we can offer a young person is not a benefit payment - it's a first job with training and a wage," he said.
He announced the expansion of a Local Apprenticeships Service for mayors in England, which he said would deliver thousands more apprenticeships for young people. Healey's speech comes as he faces pressure to cut public spending or raise taxes ahead of next month's Budget to bring down government borrowing costs. In an attempt to reassure the markets, he said all promises the government made would be "built on the rock of fiscal discipline" with him and Prime Minister Andy Burnham "united on meeting the fiscal rules".
Fiscal rules are the government's self-imposed constraints to manage decisions on spending and tax. The Budget would "give families and businesses a bit of breathing space", the chancellor said. And he admitted that "the money New Labour had in the '90s is simply not there now".
Healey blamed the Conservative Party's time in government for leaving Britain spending more on debt than on the Home Office, Ministry of Defence and Ministry of Justice combined. Tory shadow chancellor Andrew Griffith said in response to the speech that "Labour MPs will never support cutting the out-of-control welfare bill" and "with Labour, it's always more taxes if you work and more benefits if you don't". Healey praised young people as "digital natives, whip-smart, questioning, ambitious, brave" who could move from "generation jeopardy to generation hope".
But he pointed to the million young people not in education, employment or training - known as Neets - which he said created a necessity to make benefits a bridge into work, rather than a "trap". "It is not progressive to allow a bigger and bigger benefits bill, and a system which offers an income but doesn't offer a future," he said. The Local Apprenticeships Service was initially planned as a pilot in a limited number of areas but would now be available to any English mayor who wants it, he said.
Through the scheme, which the Treasury says will roll out across England from March 2027, local teams plan to match young people with employers, including small businesses that have never taken on a trainee. The department said an extra £100m was going into the scheme, "fully funded" by savings from the Department for Work and Pensions. Powers to implement the scheme will rest with mayors because "they know which firms are hiring, which colleges are delivering, which estates have been left behind," Healey said.
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