Healey Sets Target to Bring Down Welfare Spending Before the Next Election
Constantvpn.com – John Healey has said the government intends to reduce the benefits bill before the next general election, placing welfare reform at the centre of its longer-term economic plans after a Budget that drew criticism for leaving major policy decisions unresolved.
Speaking after the Budget, the chancellor said the rising cost of benefits could not continue indefinitely. Welfare spending is forecast to increase by £19bn this year to £353bn, with the Office for Budget Responsibility expecting it to reach £431bn in 2031/32. The main pressures behind that increase are health-related benefits and payments for pensioners.
“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 described the present system as unsustainable, while insisting that the government would not pursue what he called “crude cuts”. Instead, ministers are expected to set out their approach after two reviews due to be published in November.
Reviews to shape the next stage of welfare reform
One review is examining disability benefits and is being co-chaired by Labour minister Sir Stephen Timms. A second is focused on young people who are not in education, employment or training, commonly known as Neet, and is led by former minister Alan Milburn.
The government is expected to give its response before the end of the year, followed by a policy paper setting out proposed changes. Legislation could then follow next year. That timetable means the key choices on eligibility, employment support and the balance between savings and assistance have yet to be made public.
Healey said ministers had a moral obligation to help the almost one million young people outside work, education and training. In his view, enabling more of them to develop their skills and enter employment would improve their prospects while lowering welfare spending over time.
“Giving them the opportunity to fulfil their potential” can help the government “bring the welfare bill down in the long-term”.
The emphasis on helping people into work is significant because it frames the proposed reduction as a consequence of higher employment rather than simply lower payments. However, the scale of any future saving will depend on the policies that emerge from the reviews and on whether those measures succeed in removing barriers to work.
Opposition parties challenge the Budget approach
The Conservatives argued that the Budget did not go far enough in addressing the growth in welfare spending. Conservative leader Kemi Badenoch said the benefits bill was rising by tens of billions of pounds because the government had put welfare first.
“The country was overspent, overborrowed, overtaxed, and drowning in an out-of-control welfare system.”
She said the Budget lacked sufficient ambition. Reform UK also attacked the absence of detailed welfare measures, saying the government had failed to tackle the “ballooning” benefits bill.
Sir Jeremy Hunt, the Conservative MP and former chancellor, argued that the Budget was a missed opportunity. He said a central objective should have been to explain how hundreds of thousands of young people could move from welfare into employment.
“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 delaying difficult choices would make them more challenging in a year’s time. His comments reflect a wider political argument over whether the government should have announced specific changes immediately rather than waiting for the review process to conclude.
The Liberal Democrats took a different position, arguing that reform must be designed carefully. Their leader, Sir Ed Davey, said the bill should be reduced by helping people into work while ensuring they receive the care and support needed to do so.
Helen Miller, director of the Institute for Fiscal Studies, said the government still faced several difficult choices. She highlighted disability benefits and support for young people among the major areas that had not yet been fully developed in the Budget.
State pension and energy measures
The government has already committed itself to changing the existing state pension triple lock from 2030. Further welfare proposals are expected over the coming months, as ministers seek to address spending growth without abandoning support for people who are unable to work or need help with additional costs.
Although welfare reforms were largely deferred, the Budget did contain more immediate action on household energy costs. Millions of households will receive a one-off £100 payment to help with rising bills. The measure will be funded through a tax on bank profits.
In England, the payment will go to households in council tax bands A to D. Wales has said it will match the support, while the Scottish government intends to replicate it. Healey said the payment would provide “breathing space now” for households facing higher energy costs.
Gas standing charges in England, Scotland and Wales are also due to be removed during 2027, or as soon as possible afterwards. These are fixed daily fees that consumers pay regardless of how much gas they use. The charges will instead be moved into the unit price of gas, changing how customers see energy costs on their bills.
The policy choices now facing the government are politically sensitive. Welfare spending covers a wide range of support, from pensions and disability payments to assistance for people seeking work. Cutting the total bill while protecting vulnerable claimants and increasing opportunities for those able to work will require detailed decisions that ministers have not yet published.
For now, Healey’s commitment creates a clear test for the government before the next election: whether its forthcoming plans can deliver a lower welfare bill through employment and reform, while maintaining the support that people rely upon.
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