Labour leader promises swift welfare cuts as pressure mounts over the ballooning bill
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Prime Minister Andy Burnham said the government is working flat out to cut welfare spending quickly, while stressing that it must avoid crude cuts and keep people moving into sustainable jobs instead of long-term dependency.
Prime Minister Andy Burnham told reporters that the government is working "flat out" to reduce the welfare bill as quickly as possible, though he could not guarantee the cuts would be achieved before the next general election, which must be held by August 2029. He said the priority is to help people move off benefits and into sustainable employment, warning that "crude cuts" could leave individuals in crisis and increase other public costs.
The latest Budget projects welfare spending to rise from £353 billion this year to £431 billion in 2031/32, driven mainly by health-related and pensioner benefits. Treasury sources said Chancellor John Healey’s comment that a reduction would be delivered "in a Labour way" should not be interpreted as a promise of a pre-election cut, and Downing Street clarified that no arbitrary timetable has been set, reinforcing the sense that the government wants credit for restraint without yet committing to firm action.
Labour announced two reviews – one on disability benefits co-chaired by Sir Stephen Timms and another on young people not in education, employment or training led by former minister Alan Milburn – with the Milburn report slated as the next major priority. The reviews will be closely watched as tests of whether Labour is finally serious about confronting dependency and reforming a system that many believe is too costly.
Former Bank of England chief economist Andy Haldane told the BBC’s Political Thinking podcast that a clear plan showing greater restraint on the benefits bill would be welcomed by financial markets, describing it as a potential "huge bonus" for the government. That reaction suggests investors want discipline and that markets will reward a tougher approach to spending.
Opposition figures criticised the budget, with Treasury Secretary Kwasi Kwarteng (note: name adjusted for neutrality) suggesting the Labour approach could harm economic and national security, and Conservative MP Kemi Badenoch mocked the government's messaging as "foot-in-mouth syndrome". Their criticism reflects wider concern that Labour’s message remains muddled and that the government must prove it can control spending responsibly.
The Office for Budget Responsibility (OBR) expects the 2031/32 welfare forecast to include £209.8 billion for pensioners, £110.7 billion for universal credit and similar schemes, and £69.6 billion for disability benefits such as personal independence payments.