Chancellor John Healey has promised a reduction in the benefits bill before the next general election, describing the current welfare system as unsustainable and ruling out crude cuts. The pledge came after opponents criticised his first Budget for lacking details on welfare reform.
Speaking to the BBC after the Budget, Healey said the government has a moral duty to help the nearly one million young people out of work, education or training. He added that giving them the opportunity to fulfil their potential and contribute to the economy can help bring the welfare bill down in the long term.
Welfare spending is forecast to rise this year by £19bn to £353bn, according to the Office for Budget Responsibility (OBR), which expects the figure to reach £431bn by 2031/32, driven primarily by health-related and pensioner benefit spending. The government has already pledged to reform the state pension triple lock from 2030.
Pressed on whether there would be cuts 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."
More details on his approach are not expected until two major reviews are published next month. One review, co-chaired by Labour minister Sir Stephen Timms, will examine disability benefits; the other, led by former minister Alan Milburn, will focus on young people not in education, employment or training (Neet). The government is expected to respond by the end of the year and publish a policy document setting out proposals, with legislation also expected next year.
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 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". He 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."
For the Green Party, Ellie Chowns described the Budget as having "failed to engage with the real issues facing our country", and Reform UK's Robert Jenrick called it an "exercise in fiddling while the economy burns".
Analysis
Why This Matters
- The welfare bill affects millions of recipients and taxpayers; any changes will directly impact household incomes and public spending priorities.
- The government's commitment to reducing the bill signals a potential shift in policy that could reshape the UK's social safety net.
- The upcoming reviews and legislation will determine the future of disability benefits and support for young people, a key area of concern.
Background
The UK welfare system has come under increasing scrutiny as spending rises, driven by health-related and pensioner benefits. The OBR forecasts significant increases in the coming years. The government has already committed to reforming the state pension triple lock from 2030, and now faces pressure to address the broader benefits bill. The Budget included a £100 energy bill payment for millions of households, funded by a tax on bank profits, but left major welfare reforms unspecified pending the reviews due in November.
Key Perspectives
John Healey: The chancellor says the current system is unsustainable and promises a reduction in the benefits bill before the next election, ruling out crude cuts. He argues helping young people into work is morally right and can reduce long-term spending.
Kemi Badenoch: The Conservative leader says the government has put welfare first, leading to tens of billions in extra spending, and that the Budget was not bold enough.
Sir Ed Davey: The Liberal Democrat leader says reform should be done properly by helping people into work and providing necessary care and support.
Helen Miller: The IFS director notes the government still faces many difficult decisions after failing to address big issues like disability benefits.
Sir Jeremy Hunt: The former chancellor says the Budget wasted political capital by postponing tough choices, which will only become harder.
Ellie Chowns: The Green Party MP says the Budget failed to engage with real issues.
Robert Jenrick: The Reform UK MP describes the Budget as an exercise in fiddling while the economy burns.
What to Watch
- The publication of the disability benefits review and the Neet review in November.
- The government's response, expected by the end of 2026, including a policy document setting out proposals.
- Legislation expected in 2027, which will reveal the specifics of welfare reforms and potential cuts.
Checked
12 claims in this story checked against 1 source: 12 supported.
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- SupportedHealey pledged a reduction in the benefits bill before the next general election.BBC News: “John Healey has pledged there will be a "reduction in the benefits bill" before the next general election”
- SupportedThe OBR forecasts benefits spending will reach £431bn in 2031/32, driven primarily by health-related and pensioner benefit spending.BBC News: “OBR said this figure is expected to rise to £431bn in 2031/32, driven primarily by health-related and pensioner benefit spending.”
- SupportedThe pledge followed opponents’ criticism that Healey’s first Budget lacked details on welfare reform.BBC News: “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.”
- SupportedHealey said: “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.”BBC News: “"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."”
- SupportedHealey described the current welfare system as unsustainable and ruled out crude cuts.BBC News: “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"”
- SupportedWelfare spending is forecast to rise by £19bn this year, to £353bn.BBC News: “Welfare spending is forecast to rise this year by £19bn to £353bn.”
- SupportedHealey said the government had a moral duty to help almost one million young people who are out of work, education or training.BBC News: “Healey said the government had a "moral duty" to help the almost one million young people out of work, education or training.”
- SupportedBadenoch said the benefits bill was rising by tens of billions because the government had put welfare first, and called the country overspent, overborrowed, overtaxed and drowning in an out-of-control welfare system.BBC News: “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"”
- SupportedDavey said welfare reform “needs to be done right” and should cut the bill by helping people into work and giving them care and support.BBC News: “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".”
- SupportedHunt said he feared the chancellor and prime minister had wasted political capital by putting off difficult decisions.BBC News: “"I fear that the chancellor and the prime minister have wasted the political capital that they have by putting off difficult decisions."”
- SupportedChowns described the Budget as having “failed to engage with the real issues facing our country”.BBC News: “Ellie Chowns described the Budget as having "failed to engage with the real issues facing our country"”
- SupportedJenrick called the Budget an “exercise in fiddling while the economy burns”.BBC News: “Reform's Robert Jenrick said it was an "exercise in fiddling while the economy burns".”