John Healey has pledged there will be a “reduction in the benefits bill” before the next general election, after opponents criticised his first Budget for lacking details on welfare reform.
The chancellor told the it is “simply not good for Britain or progressive to have a bigger and bigger benefits bill”, labelling the current system “unsustainable”.
He ruled out “crude cuts” but more details on his approach are not expected until two major reviews are published next month.
The Conservatives accused Labour of being “addicted to welfare”, while Reform UK said the Budget did not address the “ballooning” benefits bill. Welfare spending is forecast to rise this year by £19bn to £353bn.
Watchdog and forecaster the Office for Budget Responsibility (OBR) said this figure is expected to rise to £431bn in 2031/32, driven primarily by health-related and pensioner benefit spending.
The government has already pledged to reform the existing state pension triple lock from 2030, and more proposals and changes to the welfare system are expected to emerge in the coming months.
Healey told MPs that a review of disability benefits co-chaired by Labour minister Sir Stephen Timms and one on young people not in education, employment or training (Neet) led by former minister Alan Milburn will be published in November.
The government is then expected to respond by the end of the year and publish a policy document setting out proposals, and legislation next year.
Speaking to Radio 4’s Today programme in the hours after the Budget, Healey said the government had a “moral duty” to help the almost one million young people out of work, education or training.
The chancellor added that giving them the opportunity to “fulfil their potential” and contribute to the economy can help the government “bring the welfare bill down in the long-term”.
Pressed on whether there will be cuts in welfare spending before the election, Healey replied: “There will be a reduction in the benefits bill, we’ll do that in a Labour way and we’ll do that because it is simply not good for Britain or progressive to have a bigger and bigger benefits bill.”