Day of chaos in Parliament as Chancellor appears to backtrack on promise to reduce welfare payments
Daily Telegraph 29/10/26
John Healey has been forced to admit there will be no cuts to Britain’s welfare bill before the next general election.
In a day of chaos in Parliament, the Chancellor appeared to suggest in the morning that Labour would reduce the benefits bill before the next national vote.
Treasury sources downplayed Mr Healey’s remarks later on Thursday, before Mr Burnham’s spokesman insisted that the Government “never set an arbitrary target or timetable”.
On Thursday evening, Mr Healey then said the welfare bill would not be reduced before the next election.
He told Channel 4 News: “We’re certainly committed to bringing the cost of the welfare bill down. I’ve said that, the Prime Minister’s said that.
“It is not correct to say that we set any schedule or time limit for that.”
Challenged to confirm there would be no cuts in the current parliament, Mr Healey’s replied: “So it’s not correct to say that we’re going to bring this welfare bill down in this parliament because we’ve not set a timetable for that.”
Mr Healey took no action to tackle the ballooning cost of the welfare state at Mr Healey’s first Budget on Wednesday, despite the Office for Budget Responsibility predicting that benefits spending would jump by almost 30 per cent to £431bn by 2032.
Employment crisis
The Chancellor’s remarks will throw into doubt Mr Burnham’s efforts to solve the worklessness crisis, which the Prime Minister has previously labelled a “moral failure”.
Almost half of the total is pensions and disability benefits for pensioners, despite Mr Burnham’s plan to abolish the triple lock after the next general election.
However, Mr Healey has insisted that any action to reform welfare would only follow the Timms and Milburn reviews, which are looking into disability benefits and youth unemployment respectively. They are set to be published next month.
In a post-Budget interview with BBC Radio 4’s Today programme, Mr Healey was asked whether there would be cuts in welfare before the next election.
He said: “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 progressive to have a bigger and bigger benefits bill.”
The remarks were widely interpreted as Mr Healey confirming that there would be welfare cuts before the next election.
However, the Treasury later told the BBC that the Chancellor never said welfare spending would fall in the current Parliament.
Asked whether the welfare bill would fall by 2030, a year after the latest date for a general election, Mr Burnham’s official spokesman said: “The Prime Minister and Chancellor have both been clear they want to bring the welfare bill down.
“The system clearly isn’t working for people who need it, or for taxpayers, and we will deliver reforms before the next election.
“But the answer isn’t crude cuts that push people into crisis and create bigger costs elsewhere. [We] will bring the bill down by tackling the underlying cost of spending.”
The spokesman was then challenged on whether Mr Healey had misspoken in his Today interview.
He said: “The Chancellor’s completely in line with what the PM has said in the last few months, which is that the welfare bill needs to come down. And as I say, we’ve never set an arbitrary target for that.”
On Thursday, Mr Healey accepted that the current benefits system was unsustainable, but insisted he would only look to reduce the soaring bill “in a Labour way”.
He told BBC Radio 4’s Today programme: “I’ve said clearly – the Prime Minister said as well – we have to bring the benefits bill down. You don’t do that by crude cuts, especially when people are feeling cost of living pressures.”
Kemi Badenoch, the Tory leader, said Mr Burnham and Mr Healey’s failure to commit to lowering the welfare budget was “astounding”.
She added: “The Government’s own figures show working-age welfare will go up by £60bn by 2030, yet the Treasury has to rush out and correct the Chancellor to say there is no timetable for cutting the benefits bill.
“Looks like foot-in-mouth syndrome is spreading. John Healey couldn’t even find £10bn to get defence spending to 3 per cent of GDP – the thing he quit over.
“Don’t let anyone tell you this was a ‘do no harm budget’. In doing so little, Labour have harmed our economic security and they’ve harmed our national security.”
A review by Alan Milburn, the government’s worklessness tsar, will be published soon. It will recommend sweeping reforms to schools, welfare and work to get more young people into work.
‘We have to bring down benefits’
Meanwhile, Sir Stephen Timms, the disabilities minister, is leading a review of the personal independence payments and other disability support.
In an interview with ITV’s Good Morning Britain after the Budget, Mr Healey was asked why he had not cut the welfare bill to fund his target of spending 3 per cent of GDP on defence by 2030.
He replied: “There is never any easy way in government of funding anything. What Andy Burnham and I have said is that we have to bring down the cost of welfare.
“We have to bring down the benefits bill. Now is not the time for just crude deep cuts to spending, not least because people are under pressure and feeling the cost of living. But we can do this in a different way.”
In an interview on LBC, the Chancellor also appeared to distance himself from Mr Burnham over Britain’s future relationship with the European Union.
Before Mr Healey’s maiden Budget on Wednesday, Mr Burnham used PMQs to declare that Brexit had been “bad for growth” as he twice failed to rule out a new referendum on the EU.
But when asked on Thursday whether growth would be stronger if Britain was in the EU or its single market, Mr Healey told LBC’s Nick Ferrari: “Well, I don’t actually accept that. I mean, it’s certain Brexit has certainly hit our level of growth.
“It’s certainly hit our level of trade. But we had a referendum. We’re out of the European Union. The challenge for me now is how do we make the best of an economy which this year has proved remarkably resilient. It’s confounded the forecasters.”
Mr Burnham’s decision to reopen the Brexit debate has already created a significant Labour split. Earlier this week, a minister warned him against “reopening old wounds” over Europe as another frontbencher said that the public was not ready to consider rejoining the EU.
Labour backbenchers’ opposition to cuts damaged the authority of Sir Keir Starmer during his time as prime minister, opening Mr Burnham’s path to No 10.
Last year, Sir Keir brought forward proposals to cut £5bn a year from the disability benefits bill. However, the move was opposed by more than 100 Labour MPs and Mr Burnham, the then mayor of Greater Manchester, was also critical.
The majority of the reforms were eventually torn up by Sir Stephen on the floor of the Commons on a day that struck an irreversible blow to Sir Keir’s political authority.
Earlier this year, it emerged that Pat McFadden, the Work and Pensions Secretary, had claimed in messages to Lord Mandelson that Labour cared only about who it could tax to pay more in benefits.
In a message sent during his time as Sir Keir’s enforcer in Cabinet, Mr McFadden said every meeting he had with members of the parliamentary Labour Party concerned the question: “Who can we tax in order to pay benefits to others?”
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