Healey promises reduction in welfare bill before next election
Healey Signals Plan to Bring Down Welfare Costs Before General Election
Ninoda.com – John Healey has said the government intends to reduce the benefits bill before the next general election, arguing that the continued growth of welfare spending cannot be sustained indefinitely. The pledge came after criticism that the first Budget had not yet set out a detailed programme for reforming the welfare system.
Speaking after the Budget, Healey said ministers would pursue change without resorting to what he described as “crude cuts”. Instead, the government is expected to wait for the conclusions of two major reviews due in November before publishing fuller proposals.
“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.”
Healey’s remarks underline the political pressure surrounding welfare spending, which is forecast to increase by £19bn this year to £353bn. The Office for Budget Responsibility expects the total to reach £431bn in 2031/32, with health-related payments and support for pensioners expected to account for much of the rise.
Reviews to Shape the Next Stage of Reform
The government has already indicated that the state pension triple lock will be reformed from 2030. Wider changes to welfare are expected to emerge over the coming months, once ministers have considered evidence from the two commissioned reviews.
One review, jointly chaired by Labour minister Sir Stephen Timms, is examining disability benefits. A separate inquiry into young people who are not in education, employment or training is being led by former minister Alan Milburn. Both are due to report in November.
Ministers are then expected to give their formal response before the end of the year. A policy document setting out the government’s proposed direction is anticipated after that, with legislation planned for next year.
The timetable means the Budget offered broad signals rather than a complete blueprint. The government is seeking to show that reducing reliance on benefits can be compatible with protecting people who need support, particularly those affected by ill health, disability or barriers to work.
Focus on Young People Outside Work and Education
Healey placed particular emphasis on the nearly one million young people classified as Neet, meaning they are not in education, employment or training. He said the government had a moral obligation to help them gain opportunities and avoid becoming detached from the labour market.
“The government had a moral duty” to help young people who are outside work, education and training.
His argument is that enabling more young people to develop skills, find jobs and fulfil their potential could improve their prospects while also easing welfare costs over time. That approach places employment and participation at the centre of the government’s case for reform, rather than presenting lower spending as an objective in isolation.
The challenge will be translating that principle into policies that work for people with very different circumstances. Some young people face limited job opportunities, health problems, caring responsibilities or gaps in education. The forthcoming review is expected to help determine how the government intends to address those obstacles.
Opposition Parties Demand More Detail
The Conservatives said the Budget did not go far enough. Party leader Kemi Badenoch argued that welfare spending was set to rise by tens of billions of pounds because the government had put welfare first. She said the country was “overspent, overborrowed, overtaxed, and drowning in an out-of-control welfare system”, and called the Budget insufficiently bold.
Reform UK also said the Budget had failed to confront the expanding benefits bill. The criticism from both parties reflects a wider argument over whether ministers should have announced immediate savings measures rather than waiting for the reviews to conclude.
Former chancellor Sir Jeremy Hunt told MPs that governments should not waste the opportunity created by a Budget. He said Healey could have explained how hundreds of thousands of young people would be moved from welfare into work.
“I fear that the chancellor and the prime minister have wasted the political capital that they have by putting off difficult decisions.”
Sir Jeremy said postponing those choices could make them more difficult in a year’s time. Helen Miller, director of the Institute for Fiscal Studies, also noted that significant decisions remain unresolved, including policy on disability benefits and support for young people.
Liberal Democrat leader Sir Ed Davey took a different approach, saying welfare reform must be handled properly. He argued that the bill should be reduced by helping people into employment while ensuring they receive the care and assistance required to be able to work.
Energy Support Included in the Budget
Although welfare reform was largely left for future announcements, Healey did unveil measures aimed at easing pressure from energy costs. Millions of households will receive a one-off £100 payment to help with high bills, financed through a tax on bank profits.
The payment will apply to households in council tax bands A to D in England. Wales has said it will match the support, while the Scottish government intends to replicate it. Healey said the measure would provide people with breathing space in the short term.
Gas standing charges in England, Scotland and Wales are also due to be removed during 2027, or as soon as possible afterwards. These fixed daily fees are set to be shifted into the price of gas itself, changing how households see energy costs on their bills.
The government’s central welfare promise will now be judged on whether its reviews lead to practical measures that increase employment, maintain support for those unable to work and deliver the promised fall in benefit spending before voters next go to the polls.
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