Treasury Chancellor John Healey has committed to reducing the welfare benefits bill before the next general election, stating that a continuously growing expenditure is "unsustainable" and "simply not good for Britain or progressive."
Healey, speaking to the BBC, ruled out "crude cuts" to welfare spending. However, specific details on his approach are not expected until November, when two major reviews are scheduled for publication. One review focuses on disability benefits, co-chaired by Labour minister Sir Stephen Timms, and the other on young people not in education, employment, or training (NEET), led by former minister Alan Milburn. The government is anticipated to respond to these reviews by the end of the year, with a policy document and legislation expected the following year.
"There will be a reduction in the benefits bill, we'll do that in a Labour way," Healey stated, emphasizing the government's "moral duty" to assist nearly a million young people facing unemployment or disengagement from education and training.
Critics have voiced concerns about the lack of detail in the recent Budget regarding welfare reform. The Conservative Party accused Labour of being "addicted to welfare," with leader Kemi Badenoch describing the benefits bill as "going up by tens of billions of pounds because this government has put welfare first." She characterized the Budget as "not bold enough" and warned that the country is "overspent, overborrowed, overtaxed, and drowning in an out-of-control welfare system."
Reform UK similarly argued that the Budget failed to address the "ballooning" benefits bill. Liberal Democrat leader Sir Ed Davey commented that welfare reform "needs to be done right," suggesting it should involve "cutting the bill by helping people into work and giving people the care and support they need so that they can work."
The Office for Budget Responsibility (OBR) forecasts that welfare spending will rise by £19 billion this year to £353 billion. This figure is projected to increase to £431 billion by 2031/32, primarily driven by health-related and pensioner benefit expenditures. The government has already announced plans to reform the state pension triple lock from 2030.
Institute for Fiscal Studies director Helen Miller noted that the government faces "many difficult decisions" ahead, particularly concerning disability benefits and support for young people, issues that were not fully detailed in the Budget. Conservative MP and former chancellor Sir Jeremy Hunt criticized the government for "putting off difficult decisions," suggesting that these choices will become harder to make over time.
In other Budget announcements, millions of households will receive a one-off £100 payment to help with rising energy bills. This measure will be funded by a tax on bank profits. The payment will be distributed to households in council tax bands A to D in England, with Wales and the Scottish government planning to implement similar schemes. Additionally, gas standing charges in England, Scotland, and Wales are slated to be scrapped by 2027 or as soon as possible thereafter, with these costs to be shifted onto the price per unit of energy.