Chancellor Healey Pledges Welfare Cuts Before Next Election

Chancellor John Healey has committed to reducing the national welfare bill before the next general election. He outlined this plan in broadcast interviews following the delivery of the budget on Wednesday. Healey described the approach as tough for young people who refuse offers of work or training.

The announcement came after the Office for Budget Responsibility released documents showing that sickness and disability benefits are set to cost £100bn annually by the end of the decade. Healey faced repeated questions about these rising costs. He stated that the current benefits system is unsustainable and must be brought down.

Healey avoided making immediate changes to welfare in the budget itself. He deferred those decisions to a future spending review. Instead, he focused on providing small financial relief to households. This included £100 off energy bills to help with the cost of living. He also postponed decisions on how to fund the increase in defence spending to 3% of national income.

In an interview on BBC Radio 4’s Today, Healey said the government would expect young people to take up job and training offers. He noted that this strategy mirrors previous Labour governments. He referenced the late 1990s when youth unemployment in his South Yorkshire constituency was one in five. Healey said the government would be tough on those who did not accept support while providing real advice to those who did.

The Office for Budget Responsibility projects that total welfare spending will rise from £334bn last year to £431bn by 2030. Approximately half of that spending goes to pensioners, while a quarter covers sickness and disability benefits. The overall forecast for spending has increased by £8bn since March.

Healey told Good Morning Britain that the new model would be based on conditions attached to welfare payments for young people. He said this method helped reduce unemployment in the 1990s. He emphasized that the government would do this in a Labour way, arguing that a growing benefits bill is not good for Britain or progress.

The Resolution Foundation, a leading economic thinktank, criticized the budget as a scattergun approach. Ruth Curtice, the chief executive, said the measures did little to address Britain’s sharp economic challenges. She argued that cost of living support is spread too thinly. This will leave families with higher energy bills than they faced during the previous energy shock.

The budget includes scrapping standing charges on gas bills. It also provides £100 energy payments to up to 20 million households in council tax bands A to D. Despite these measures, the Resolution Foundation expects typical annual energy bills to reach £1,750 in 2026-27 after government support. This is higher than the £1,685 paid during the 2022-23 energy price jump.

Healey said the single best thing for UK economic policy would be peace in the Middle East and Ukraine. He expressed a desire to reopen the strait of Hormuz and end the Russian invasion of Ukraine. He added that he would work with US President Donald Trump if it helps bring the parties together.

The government will set out specific welfare changes after two reports are completed. These include the Milburn review of young people and work and the Timms review of the disability benefit system. Healey said there would be no crude cuts, echoing comments made by Andy Burnham after Labour MPs blocked previous attempts to cut disability benefits.