Labour Chancellor Healey vows to cut benefits bill before next election

Labour Chancellor John Healey said the government will achieve a "reduction in the benefits bill" before the next general election, arguing that a growing benefits bill is unsustainable for the country. He ruled out "crude cuts" and indicated that further details will follow after two major reviews are published in November, covering disability benefits and the situation of young people not in education, employment or training (NEET).

The Office for Budget Responsibility projects welfare spending to rise to £353 billion this year and to reach £431 billion by 2031/32, driven mainly by health-related and pensioner benefits. The government has already announced plans to reform the state pension triple lock from 2030 and expects to issue a policy document and related legislation by the end of the year and next year respectively.

"We have a moral duty to help the almost one million young people out of work, education or training and give them the opportunity to fulfil their potential," Healey told BBC Radio 4's Today programme.

Opposition leaders responded sharply. Conservative party leader Kemi Badenoch said the benefits bill was "going up by tens of billions of pounds because this government has put welfare first" and described the budget as "not bold enough." Liberal Democrat leader Sir Ed Davey called for welfare reform that "helps people into work and gives them the care and support they need so that they can work."

Conservative former chancellor Sir Jeremy Hunt warned that the chancellor and prime minister had "wasted political capital" by postponing difficult decisions, adding that such decisions would become harder in a year's time.

The budget also introduced a one-off £100 payment for households in council tax bands A to D in England, funded by a tax on bank profits, with similar measures announced in Wales and Scotland. Gas standing charges are slated for removal by 2027, with the cost to be shifted onto unit energy prices. Healey acknowledged that the payment would provide only limited relief, stating that experts expect it to help people through the winter but that the government cannot fully offset price pressures driven by external factors.