Treasury Steps Back From Timetable On Welfare Spending Cuts

The Treasury is disputing claims that Chancellor John Healey promised to reduce the benefits bill before the next general election. Healey told BBC Radio 4's Today programme that the benefits bill would fall, stating the government would achieve this in a Labour way without crude cuts during cost of living pressures. Treasury sources later took issue with that statement being treated as an election timeline promise, indicating ministers are not committing to a pre-election reduction. Healey pointed to two major reports due next month that will help map long-term system changes, noting the government is already slowing the rate of welfare spending growth. He described the current system as unsustainable, highlighting a moral duty to help nearly one million young people who are out of work, education, or training. These young people will be expected to accept offers of work or training to lower welfare costs over the long term.

Reports

A disability benefits review co-chaired by Labour minister Sir Stephen Timms and a young person review led by former minister Alan Milburn will be published in November. The government plans to respond by the end of the year with a policy document and proposals, followed by legislation next year.

Reactions

Welfare spending is forecast to rise by 19 billion pounds this year to reach 353 billion pounds, with the Office for Budget Responsibility projecting an increase to 431 billion pounds by 2031 and 2032. Conservative Party leader Kemi Badenoch accused Labour of putting welfare first and called the system out of control, while Reform UK argued the Budget failed to address ballooning costs. Liberal Democrat leader Sir Ed Davey stated that welfare reform requires helping people into work, and Institute for Fiscal Studies director Helen Miller noted that the government still faces difficult decisions on disability benefits and young people.

Context

Controlling public spending on welfare while managing rising health and pensioner costs remains a central challenge for UK fiscal policy. Governments often use independent reviews and long-term forecasts from bodies like the Office for Budget Responsibility to shape future legislative reforms.