Treasury will not commit to reducing welfare bill before next election

The Treasury is refusing to say that Chancellor John Healey promised the BBC that the welfare bill will be reduced before the next general election.

When Healey was asked on Radio 4’s Today Programme whether the bill would be cut before polling day, he replied: "There will be, there will be a reduction in the benefits bill, we'll do that in a Labour way."

However, several Treasury sources objected to that being read as a pledge to do so by the next election, with one saying Healey was specifically trying to avoid creating that impression.

That indicates, instead, that ministers are not committed to cutting the benefits bill by the next election.

Speaking to Today, the chancellor said: "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."

He said two "big reports" next month would help the government "map out the way that we need to change the system for the long run" and said the government has "been reducing the rate of increase in the welfare bill".

Healey said the present system was "unsustainable" and that the government had a "moral duty" to support the almost one million young people who are out of work, education or training.

He said young people would be expected to accept offers of work or training "and that's the way we can take welfare bills down in the long term".

When asked whether there would be welfare cuts before the next election, the chancellor said: "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.

"And I feel a moral duty to deal with these youngsters that have been written off by previous governments."

A review of disability benefits, co-chaired by Labour minister Sir Stephen Timms, and a review of young people not in education, employment or training (Neet), led by former minister Alan Milburn, will be released in November.

The government is expected to reply by the end of the year and then publish a policy document with proposals, followed by legislation next year.

The Conservatives accused Labour of being "addicted to welfare", while Reform UK said the Budget failed to tackle the "ballooning" benefits bill. Welfare spending is projected to increase this year by £19bn to £353bn.

The Office for Budget Responsibility (OBR) said this is expected to climb to £431bn in 2031/32, driven mainly by health-related and pensioner benefit spending.

Of the projected total for 2031/32, £209.8bn is for pensioners, including the state pension and winter fuel payments, while £110.7bn is for universal credit and legacy equivalents and £69.6bn is for disability benefits such as personal independence payments.

The government has already promised to reform the current state pension triple lock from 2030, and further proposals and changes to the welfare system are expected in the coming months.

The chancellor’s comments followed Conservative Party leader Kemi Badenoch’s response to the Budget, in which she said the benefits bill was "going up by tens of billions of pounds because this government has put welfare first".

She said the country was "overspent, overborrowed, overtaxed, and drowning in an out-of-control welfare system", and added that the Budget was "not bold enough".

Liberal Democrat leader Sir Ed Davey said welfare reform "needs to be done right", adding that this should mean "cutting the bill by helping people into work and giving people the care and support they need so that they can work".

Helen Miller, director of the Institute for Fiscal Studies, said the government still has "many difficult decisions" ahead after failing to spell out several major issues, including disability benefits and support for young people.