Welfare spending set to hit £431bn by 2030 as Healey promises cuts

Households will face tighter eligibility rules for benefits if they are young and refuse work or training offers, according to Chancellor John Healey. He stated that the total cost of the welfare bill will decrease before the next general election, moving to reverse a steady upward trend in government spending on social support.

The Office for Budget Responsibility projects that total welfare spending will rise from £334bn in the previous year to £431bn by 2030. Approximately half of that expenditure is allocated to pensioners, while a quarter covers sickness and disability benefits. These figures have increased by £8bn since March, a rise that has intensified pressure on the Treasury to identify savings.

Healey acknowledged the scale of the challenge on BBC Radio 4’s Today programme, declaring that the benefits bill must be brought down. He described the current system as unsustainable, though he aligned with Labour peer Andy Burnham in ruling out crude cuts. He noted that the government intends to announce specific changes after two independent reviews are completed: the Milburn review on young people and work, and the Timms review of the disability benefit system.

The Chancellor emphasized that the reduction in spending will be achieved in a way that avoids the political pitfalls of previous attempts. He recalled his own constituency in South Yorkshire, where youth unemployment was one in five when Labour last took power in the late 1990s. He said the government will adopt a firm stance on those unwilling to accept support, while simultaneously providing advice and resources to help young people realize their potential.

The budget delivered on Wednesday offered modest relief to most households, including £100 off energy bills to mitigate the cost of living. These payments are funded by higher taxes on banks and landlords. However, Healey deferred decisions on how to finance the target of 3% of national income for defense spending. Those hard choices, along with detailed welfare reforms, are expected to be addressed during the upcoming spending review.

Economic conditions abroad also factor into domestic policy. Healey stated that peace in the Middle East and Ukraine is the best outcome for the UK economy. In response to questions about international relations, he suggested that US President Donald Trump is likely the only figure capable of uniting conflicting parties. The government aims to reopen the Strait of Hormuz and see the end of the Russian invasion of Ukraine to stabilize global markets.

The Resolution Foundation, a thinktank, criticized the budget as scattergun and argued it fails to tackle core economic issues. Ruth Curtice, the organization’s chief executive, noted that cost-of-living support is spread too thinly. She warned that families receiving help will still face higher energy bills than those paid during the 2022 and 2023 price spike following Russia’s invasion of Ukraine.

For the 2026 and 2027 tax year, typical annual energy bills are projected to reach £1,750 after government support. This compares to £1,685 during the previous energy crisis. The budget eliminates standing charges on gas bills and provides the £100 payment to up to 20 million households in council tax bands A through D.