UK Labour leader pledges swift reduction of welfare spending

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.

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.

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.

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".

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.