John Healey has pledged there will be a "reduction in the benefits bill" before the next general election, after opponents criticised his first Budget for lacking details on welfare reform. The chancellor told the BBC it is "simply not good for Britain or progressive to have a bigger and bigger benefits bill", labelling the current system "unsustainable". He ruled out "crude cuts" but more details on his approach are not expected until two major reviews are published next month.
The Conservatives accused Labour of being "addicted to welfare", while Reform UK said the Budget did not address the "ballooning" benefits bill. Welfare spending is forecast to rise this year by £19bn to £353bn. Watchdog and forecaster the Office for Budget Responsibility (OBR) said this figure is expected to rise to £431bn in 2031/32, driven primarily by health-related and pensioner benefit spending.
The government has already pledged to reform the existing state pension triple lock from 2030, and more proposals and changes to the welfare system are expected to emerge in the coming months. Healey told MPs that a review of disability benefits co-chaired by Labour minister Sir Stephen Timms and one on young people not in education, employment or training (Neet) led by former minister Alan Milburn will be published in November. The government is then expected to respond by the end of the year and publish a policy document setting out proposals, and legislation next year.
Speaking to BBC Radio 4's Today programme in the hours after the Budget, Healey said the government had a "moral duty" to help the almost one million young people out of work, education or training. The chancellor added that giving them the opportunity to "fulfil their potential" and contribute to the economy can help the government "bring the welfare bill down in the long-term". Pressed on whether there will be cuts in welfare spending before the election, Healey replied: "There will be a reduction in the benefits bill, we'll do that in a Labour way and we'll do that because it is simply not good for Britain or progressive to have a bigger and bigger benefits bill." The chancellor's remarks came after Conservative Party leader Kemi Badenoch responded to the Budget by saying the benefits bill was "going up by tens of billions of pounds because this government has put welfare first".
She said the country was "overspent, overborrowed, overtaxed, and drowning in an out-of-control welfare system", adding that the Budget was "not bold enough". Liberal Democrat leader Sir Ed Davey said welfare reform "needs to be done right", adding this should involve "cutting the bill by helping people into work and giving people the care and support they need so that they can work". Helen Miller, director of the Institute for Fiscal Studies, noted the government still has "many difficult decisions" to take after not fleshing out several big issues, including disability benefits and support for young people.
Conservative MP and former chancellor Sir Jeremy Hunt said one of the key rules was to "never waste a Budget", adding that Healey could have explained how he would get hundreds of thousands of young people "off welfare and into work". After highlighting other policy areas not detailed in the Budget, Sir Jeremy told the House of Commons: "I fear that the chancellor and the prime minister have wasted the political capital that they have by putting off difficult decisions." He added: "The problem is these decisions are going to be harder in a year's time than they are today." What the Budget offers for under 25s - and what it leaves out Your pay, energy bills and savings: How the Budget affects you Tories would prevent long-term jobless spending benefits on alcohol and cigarettes One area where Healey did make announcements in the Budget was on energy prices. Millions of households will get £100 to help with soaring energy bills to be paid for by a tax on bank profits, which Healey said would give "breathing space now" to people.
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