Healey promises lower welfare bill before next election with firm line on young people

Chancellor John Healey has said the welfare bill will be reduced before the next general election, and that young people who refuse support to find work or training will face a "tough" approach.

He was pressed repeatedly on the subject in broadcast interviews after Office for Budget Responsibility documents suggested that sickness and disability benefits would cost £100bn a year before the end of the decade.

Healey delivered his budget on Wednesday, offering modest giveaways to most households, including £100 off energy bills to ease the cost of living. However, he put off some hard choices on how to pay for defence spending at 3% of national income, and he set out no welfare changes. Both issues are expected to be dealt with at the spending review.

Speaking to BBC Radio 4's Today programme, Healey said: "We have to bring the benefits bill down." He echoed Andy Burnham in saying there would be no "crude cuts", after Keir Starmer's attempts to cut disability benefits were stopped by Labour MPs. Even so, he called the welfare system "unsustainable" and said the government would announce changes after two major reports: the Milburn review of young people and work, and the Timms review of the disability benefit system.

Asked whether the overall bill would fall before the next election, he replied: "There will be a reduction in the benefits bill. We'll do that in a Labour way and we will do that because it is simply not good for Britain or progress to have a bigger and bigger benefits bill."

On Good Morning Britain, Healey said the approach would draw on earlier Labour governments, which attached more conditions to welfare payments for young people. He recalled that when the last Labour government was first elected at the end of the 1990s, youth unemployment was high, at one in five in his area of South Yorkshire. The response then, he said, was to be tough on those not prepared to take up the offer while also giving real support and advice telling young people: "You have real potential."

The OBR said total welfare spending would grow from £334bn last year to £431bn by 2030. About half of that would go to pensioners and a quarter to sickness and disability benefits. Forecast spending has risen by £8bn since March.

Healey said he had made his budget choices to give households some "breathing space", paid for through higher taxes on banks and landlords. He added that the best thing for UK economic policy would be peace in the Middle East and Ukraine. Asked by Sky News about frustration with Donald Trump's international actions, he said the US president was "probably the one man that can bring those parties together", and that the government wanted to reopen the strait of Hormuz and see an end to the Russian invasion of Ukraine.

Meanwhile, the Resolution Foundation described the budget as "scattergun" and said it did little to address Britain's economic challenges. The thinktank said typical annual energy bills were expected to reach £1,750 after government support in 2026-27, compared with £1,685 during the 2022-23 price jump that followed Russia's invasion of Ukraine. The budget scraps standing charges on gas bills and provides £100 payments to up to 20m households in council tax bands A to D.

Ruth Curtice, the thinktank's chief executive, said cost of living support was "being spread far too thinly and will leave even those families receiving help facing higher energy bills than they did during the last energy price shock."