Healey Targets Young Adults For New Welfare Rules

Chancellor John Healey confirmed today that the government will reduce the total welfare bill before the next general election. He described the coming changes as a tough approach for young people who decline offers of work or training. This pledge follows a budget delivered on Wednesday that included smaller cost-of-living measures but left major structural decisions on the back burner.

The pressure for action has mounted after the Office for Budget Responsibility released data showing welfare spending is on a steep upward trajectory. Total welfare costs stood at £334bn in the previous year. The OBR now forecasts that figure will climb to £431bn by 2030. Approximately half of that total is allocated to pensioners, while a quarter goes toward sickness and disability benefits. The overall spending forecast has increased by £8bn since March.

Healey addressed the issue in interviews on BBC Radio 4 and Good Morning Britain. He stated that the current system is unsustainable and that the benefits bill must come down. He rejected the idea of crude cuts, a term previously used by Andy Burnham, but insisted on a Labour approach that balances support with expectation. Healey noted that a larger benefits bill is not good for progress in Britain.

The plan relies on two upcoming reports: the Milburn review on young people and work, and the Timms review of the disability benefit system. Healey said the government expects young claimants to take up available offers. He drew a parallel to the Labour government elected at the end of the 1990s, which faced youth unemployment rates of one in five in South Yorkshire. Healey said the model then was tough on those who refused offers but provided real support and advice to those who engaged.

The budget itself focused on immediate household relief. The government scrapped standing charges on gas bills and will provide £100 energy payments to up to 20 million households in council tax bands A to D. These measures are funded by higher taxes on banks and landlords. Healey described these steps as giving households breathing space, though he deferred decisions on how to fund 3% of national income for defense spending to the spending review.

Criticism emerged quickly from the Resolution Foundation, an economic thinktank. Its chief executive Ruth Curtice labeled the budget scattergun. She argued that the cost-of-living support is spread too thinly. The Foundation calculates that typical annual energy bills will reach £1,750 in 2026-27 after government support. That figure exceeds the £1,685 paid during the 2022-23 energy price spike following the invasion of Ukraine.

Healey also weighed in on global economic factors. He told Sky News that peace in the Middle East and Ukraine is the single best thing for UK economic policy. He said he would work with US President Donald Trump to bring parties together. The chancellor expressed a desire to reopen the Strait of Hormuz and end the Russian invasion of Ukraine.