Chancellor Vows Welfare Bill Cuts by Next Election

Total welfare spending is forecast to reach £431 billion by 2030, according to the Office for Budget Responsibility. Chancellor John Healey said on Wednesday that the government will reduce that figure before the next general election. He described the current cost of benefits as unsustainable for Britain's progress.

Healey made the remarks in broadcast interviews following his budget announcement. The OBR data indicates that welfare costs will grow from £334 billion last year to the projected 2030 level. Approximately half of that spending will go to pensioners, while a quarter will cover sickness and disability benefits. The forecast has increased by £8 billion since March.

In his budget, Healey offered £100 off energy bills for up to 20 million households in council tax bands A to D. He also scrapped standing charges on gas bills. These measures are intended to provide breathing space for families. Healey stated that these choices were paid for through higher taxes on banks and landlords.

The Chancellor said the government will wait for two major reports before announcing specific welfare changes. These include the Milburn review of young people and work, and the Timms review of the disability benefit system. Healey promised no crude cuts, echoing comments made by Andy Burnham after Labour MPs blocked previous attempts to reduce disability benefits.

Healey said the government would take a tough approach to young people who refuse support to find work or training. He recalled that youth unemployment in South Yorkshire was one in five when the last Labour government took office in the late 1990s. He said the response then was to be firm with those who did not accept offers while providing real support and advice.

Healey told BBC Radio 4 that the government would handle the reduction in the benefits bill in a Labour way. He said it was not good for Britain to have an ever-larger benefits bill. On Good Morning Britain, he added that the approach would draw on conditions attached to welfare payments for young people in earlier Labour administrations.

The Resolution Foundation called the budget scattergun. Ruth Curtice, the thinktank's chief executive, said cost of living support was being spread too thinly. She noted that typical annual energy bills are expected to reach £1,750 after government support in 2026-27. That is higher than the £1,685 bills families faced during the 2022-23 price shock.