Labour’s welfare turmoil intensified today after Andy Burnham rejected the prospect of “brutal cuts”, following the Chancellor’s embarrassing U-turn over plans to reduce the bill before the next election.
The Prime Minister maintained that he was “pioneering a new approach”, despite growing uncertainty over when the rapidly increasing costs could be brought under control.
John Healey alarmed aides in post-Budget interviews when he appeared to promise that benefits would be reduced before voters next went to the polls.
The Treasury was forced into a rapid retreat before Downing Street insisted there was no “arbitrary timetable” for achieving savings.
Speaking last night, Mr Healey appeared to completely soften his earlier stance, saying: “It is not correct to say that we’re going to bring this welfare bill down in this Parliament.”
Defence Secretary Wes Streeting added to the confusion during a round of broadcast interviews this morning, arguing that the Chancellor had not ruled out cuts before the election.
However, he indicated that the Government would need to move cautiously to avoid a Labour rebellion like the one that severely damaged keir Starmer.
In an ITV documentary marking his first 100 days in No10, Mr Burnham made another attempt to set out his welfare strategy.
In an ITV documentary marking his first 100 days in No10, Andy Burnham again outlined his approach to welfare
The PM watched his team beat Newcastle at Everton’s stadium with his family last night
John Healey alarmed aides after appearing to pledge in post-Budget interviews that benefits would be lowered before the next election
“I don’t actually want to see anyone in their 20s on benefits. I just don’t think that’s a good place to be, unless people can’t be in work for reasons due to disability or whatever else it might be,” he said.
Asked how he intended to reduce the bill, the premier said: “You don’t make the saving just to go to brutal cuts, because if you just go to brutal cuts… you will leave people in absolute crisis and then they will be going into other services in a chaotic way.
“So I’m pioneering a different approach and, you know, I’m going to stick to my guns on it.”
The dispute comes as households are warned they could be more than £1,000 worse off over the next two years, with the energy crisis and Labour tax rises putting further pressure on family finances.
The Resolution Foundation made the estimate for working-age people’s disposable incomes in a bleak assessment of the Budget published yesterday.
The 2020s are now on course to become the worst decade for living standards since comparable records began in the 1960s.
Ruth Curtice, the foundation’s chief executive, described Chancellor John Healey’s Budget as “scattergun”, including a £100 reduction in energy bills for homes in lower council tax bands.
She warned that even households receiving support — alongside the continued suspension of the 5 per cent VAT on electricity costs — would pay more next year than they did during the last crisis in 2022.
Kemi Badenoch called it “astounding” that the Government could not promise to reduce benefits this decade, despite forecasts that welfare costs will increase by more than £60billion by 2029.
The Tory leader told the Daily Mail: ‘Labour is addicted to benefits and this is why they are getting into a mess every day.
‘In just 24 hours, the Chancellor has said there will be no cuts to the benefits bill, gone on the BBC and said actually there will, then had to admit that actually there won’t be.
‘All while officials scramble to clean up the chaos. It appears the Prime Minister’s ‘foot in mouth’ is contagious.’
Delivering his Budget on Wednesday, the Chancellor said the Government would ‘bring down the welfare bill’ but offered no new proposals to cut a bill that is forecast to top £350billion next year.
In interviews afterwards, Mr Healey was pressed repeatedly on what he would do about the issue and dismissed ‘crude cuts’.
‘I’ve said clearly, the Prime Minister said as well, we have to bring the benefits bill down,’ he told BBC Radio 4’s Today programme.
Asked directly if there ‘will be cuts in welfare before the election’, the Chancellor replied: ‘There will be, 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…
‘I feel a moral duty to deal with these youngsters who at the moment have been written off by previous governments.’
Aides told the BBC that Mr Healey had not been making any commitment on when there would be cuts.
Sources accused the broadcaster of ‘editorialising’ by highlighting the exchange, even though the Chancellor’s response appeared clear.
Mr Burnham then stepped in, with Downing Street insisting there was no ‘arbitrary timetable’ for reducing the costs. Repeatedly asked about the remarks on a visit in the Midlands, the PM said: ‘We want to get the welfare bill down as quickly as possible.’
He added: ‘We just want to get stuck into supporting people… we are working hard to cut the welfare bill as soon as we possibly can.’
No10 argued that Mr Healey’s views were ‘completely in line’ with those of Mr Burnham.
In a fresh twist last night it emerged that the Chancellor told Channel 4 News ‘it’s not correct to say we’re going to bring the welfare bill down in this Parliament’ – suggesting he has abandoned hope of cuts before 2030-31.
‘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,’ he said.
Mr Streeting had a different interpretation of the remarks this morning, telling Times Radio: ‘The Chancellor hasn’t ruled out cutting the welfare bill this Parliament.
‘What he said, and I think reasonably, is that there are two significant reviews going on at the moment.’
Mr Streeting told ITV’s Good Morning Britain: ‘Candidly, we saw when we came in after the general election there was an attempt to bring the welfare bill down by putting an arbitrary figure on it.
‘And when the MPs who want to see the welfare bill coming down saw the detail and who was impacted, people said, ”Hang on a minute, these cuts are falling on the wrong people”.’