The Treasury has pushed back against Chancellor John Healey's apparent pledge to reduce the welfare bill before the next general election, saying his comments in a broadcast interview had been over-interpreted.
After the BBC reported that Healey had promised a reduction in the benefits bill before the election, Treasury sources said the remarks were not intended as a commitment to cut welfare spending within that timeframe. The BBC's political editor reported that officials had told him the first interpretation was not accurate and that if Healey had wanted to make such a pledge he would have announced it in the Budget.
The exchange that sparked the row came when presenter Nick Robinson pressed Healey: "There will be cuts in welfare before the election?" Healey replied: "There will be there will be a reduction in the benefits bill. We'll do that in a Labour way and we will do that because it is simply not good for Britain or progressive to have a bigger and bigger benefits bill."
The Guardian's Andrew Sparrow said the Treasury's account implicitly meant benefit spending would not fall before the election. Conservative leader Kemi Badenoch accused Labour of being "addicted to welfare", while Reform UK said the Budget had not addressed the "ballooning" benefits bill.
In a separate interview on GB News, Healey denied postponing difficult decisions on welfare, insisting the government was making changes now. He said the government had started putting back face-to-face assessments two years ago and had changed the terms of universal credit so people did not have to brand themselves as too sick to work. "So, those are changes we're making now. But in the long run, as I've argued, and the prime minister has said, too, we have to bring the cost of benefits down," he said.
The Budget included mostly relatively minor measures, including a £100 energy bill payment for households in council tax bands A to D, funded by a tax on bank profits. But the Resolution Foundation accused Healey of a "complete failure" to target help with energy bills at those most in need, noting that the poorest half of households would gain £158 on average from cost of living support this year and next, just £14 more than the richest half.
The thinktank also said tight spending plans beyond 2028-29 implied a return to austerity, and that median real annual disposable incomes for working-age households were forecast to fall by £1,050 (3%) between now and the end of the parliament.
The government is awaiting two major reviews, one on disability benefits co-chaired by Sir Stephen Timms and one on young people not in education, employment or training led by Alan Milburn. The reviews are due to be published in November. The government is expected to respond by the end of the year and publish a policy document setting out proposals, with legislation next year.
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Analysis
Why This Matters
The row exposes a central tension in Labour's fiscal strategy: the government acknowledges the welfare system is unsustainable but has not yet detailed how it will curb spending, leaving it vulnerable to attacks from both the right and left.
The Treasury's correction suggests benefit bills will continue rising until at least the next election, a politically awkward position that opposition parties will use to frame Labour as weak on welfare.
The Budget's failure to provide significant targeted support for the poorest households, combined with falling real incomes, could fuel public discontent and shape the timing of the next election.
Background
John Healey delivered his first Budget on 28 October 2026, with relatively modest tax and spending measures. Welfare spending is forecast by the Office for Budget Responsibility to rise from £334bn last year to £431bn by 2030-31, driven by health-related and pensioner benefits. The government has pledged to reform the state pension triple lock from 2030 and is awaiting two reviews, one on disability benefits (Timms review) and one on young people not in work or training (Milburn review), before outlining changes. Healey has ruled out "crude cuts" but called the current system "unsustainable".
Key Perspectives
Chancellor John Healey: Says the welfare system is "unsustainable" and that the government must bring the benefits bill down, but insists changes will be done "in a Labour way" without crude cuts. Argues the government is already making changes, such as bringing back face-to-face assessments and reforming universal credit.
Treasury officials: Told the BBC that Healey's remarks had been over-interpreted and that he had not committed to cutting the welfare bill before the election; if he had wanted to, he would have announced it in the Budget.
Conservative Party leader Kemi Badenoch: Accused Labour of being "addicted to welfare" and said the Budget was "not bold enough".
Reform UK: Said the Budget did not address the "ballooning" benefits bill.
Liberal Democrat leader Sir Ed Davey: Said welfare reform "needs to be done right", involving cutting the bill by helping people into work and providing care and support.
Institute for Fiscal Studies director Helen Miller: 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.
Resolution Foundation: Accused Healey of a "complete failure" to target energy bill support at those most in need, and said tight spending plans imply a return to austerity.
Former Conservative chancellor Sir Jeremy Hunt: Said Healey had "wasted the political capital" by putting off difficult decisions.
What to Watch
Publication of the Timms and Milburn reviews next month, their recommendations will shape the government's welfare reform agenda.
The government's formal response and policy document expected by the end of the year, which will signal the scale and direction of cuts.
The timing of the next general election, falling real incomes could push the prime minister to call an election before the full impact is felt, despite Andy Burnham ruling out one within 12 months.
12 claims in this story checked against 2 sources: 11 supported.
Show each claim
SupportedThe Treasury denied that Healey had committed to cutting the welfare bill before the election and said his remarks were misinterpreted.UK news | The Guardian: “Treasury says Healey hasn't committed to cutting welfare bill before election, claiming interview answer misinterpreted”
SupportedHealey said there would be “a reduction in the benefits bill”.BBC News: “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”
SupportedThe BBC reported that Healey had promised a reduction in the welfare bill before the next election.BBC News: “John Healey has pledged there will be a "reduction in the benefits bill" before the next general election”
SupportedBBC political editor Chris Mason said Treasury sources told him the first interpretation was inaccurate and that Healey would have announced a pledge in the Budget.UK news | The Guardian: “Mason said the Treasury had told him the first interpretation was not accurate, and that if Healey really wanted to commit to getting cutting the benefits bill before the general election, he would have announced that in the budget.”
SupportedHealey answered Robinson’s question with: “There will be there will be a reduction in the benefits bill.”UK news | The Guardian: “Healey: There will be there will be a reduction in the benefits bill . We’ll do that in a Labour way”
SupportedAndrew Sparrow said the Treasury’s account implicitly meant benefit spending would not fall before the election.UK news | The Guardian: ““correcting” this story means the Treasury is implicitly saying benefit spending won’t go down before the election”
SupportedBadenoch accused Labour of being “addicted to welfare”.BBC News: “The Conservatives accused Labour of being "addicted to welfare"”
SupportedReform UK said the Budget had not addressed the “ballooning” benefits bill.BBC News: “Reform UK said the Budget did not address the "ballooning" benefits bill.”
Partly supportedThe Budget included a £100 energy payment for households in council tax bands A to D, funded by a tax on bank profits.UK news | The Guardian: “energy payments of £100 for up to 20m households in council tax bands A to D.”
SupportedThe Resolution Foundation said the poorest half of households would gain £158 on average from cost-of-living support this year and next, £14 more than the richest half.UK news | The Guardian: “The poorest half of households will gain £158 on average from cost of living support this year and next, just £14 more than the £144 received by the richest half”
SupportedThe Resolution Foundation said median real annual disposable incomes for working-age households were forecast to fall by £1,050 (3%) between now and the end of the parliament.UK news | The Guardian: “Between now (2026-27) and the end of the parliament (2028-29), typical incomes are forecast to fall in total by £1,050 (3 per cent).”
SupportedThe disability benefits and young people’s reviews are due in November, with a government response and policy document expected by year-end and legislation next year.BBC News: “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.”
Correction
An earlier version of this story said the Treasury clarification came a day after the BBC reported Healey's remarks. Both reports appeared on the same day.