Treasury refuses to promise welfare bill cut before next election

Chancellor John Healey has signalled that the government will reduce the benefits bill, but the Treasury is refusing to commit to doing so before the next general election. Healey told the Today Programme on Radio 4 that “there will be a reduction in the benefits bill, we’ll do that in a Labour way.” Yet several Treasury sources disputed any interpretation that this was a promise to cut the bill by polling day.

One source suggested Healey was explicitly trying to avoid leaving that impression. The chancellor himself added: “I have said clearly and the prime minister has said as well, we have to bring the benefits bill down. You don’t do that by crude cuts, especially when people are feeling the cost of living pressures.”

Reviews and long-term reform

Healey pointed to two “big reports” due next month that would help the government “map out the way that we need to change the system for the long run”. A review of disability benefits is being co-chaired by Labour minister Sir Stephen Timms, while former minister Alan Milburn is leading a review on young people not in education, employment or training. Both are expected to be published in November.

The chancellor said the current system is “unsustainable” and that the government has been “reducing the rate of increase in the welfare bill”. He also spoke of a “moral duty” to help almost one million young people out of work, education or training. Healey said young people would be expected to take up offers of work or training, “and that’s the way we can take welfare bills down in the long term”.

Political reaction and fiscal pressure

Conservative leader Kemi Badenoch accused the government of putting “welfare first” and said the country is “overspent, overborrowed, overtaxed, and drowning in an out-of-control welfare system”. Liberal Democrat leader Sir Ed Davey said welfare reform “needs to be done right” and should involve “cutting the bill by helping people into work and giving people the care and support they need so that they can work”. Welfare spending is forecast to rise by £19bn this year to £353bn, according to the Office for Budget Responsibility. That figure is expected to reach £431bn in 2031/32, driven primarily by health-related and pensioner benefit spending. The government has already pledged to reform the state pension triple lock from 2030, and more proposals are expected in the coming months.