Chancellor John Healey has called on Labour activists to support welfare reforms, insisting that getting young people off benefits is a “moral duty”. Speaking at the Labour conference ahead of October’s Budget statement, he said benefits “should be a bridge to work” and warned that welfare must not become “a trap that people can’t escape”.
Benefits must offer a future
Mr Healey told the conference: “It is simply not progressive to allow a bigger and bigger benefits bill and a system which offers an income but doesn’t offer a future.” He highlighted an inquiry by former Labour cabinet minister Alan Milburn, who has warned that the benefits system is partly to blame for a million young people being stuck without employment, education or training.
The Chancellor told the conference: “The best thing we can offer a young person isn’t a benefit payment. It’s a first job. With training. And a wage.” He added: “This is more than an economic must. This is a moral duty.”
Apprenticeship funding and fiscal rules
Mr Healey announced that mayors would be given new powers to help local firms create apprenticeships, with funding of £100 million. He also insisted that he and Prime Minister Andy Burnham were “in lockstep” in their commitment to the fiscal rules drawn up by former Chancellor Rachel Reeves, which effectively limit borrowing. This followed suggestions that Mr Burnham might relax the restrictions.
The Chancellor also confirmed plans to provide £6 billion of contracts for British shipyards to build docks for new submarines.
Political reaction
Any changes that involve cutting payments or introducing stricter eligibility rules are likely to be highly controversial with Labour MPs and activists. Plans to limit disability and sickness-related benefits were suspended in 2025 following a rebellion by backbench Labour MPs.
Conservative Shadow Chancellor Andrew Griffith described the speech as “hot air”. He said the Chancellor “is a month away from his first Budget and failed to say how he was going to tackle our out-of-control welfare bill, increase defence spending to 3% of GDP, scrap Labour’s fuel duty hike, or put forward a credible plan to get our economy growing and young people into work.”
Reform spokesman Robert Jenrick said: “Healey says there’s a moral duty to cut the welfare bill, but he’s got absolutely no ideas how to fix it. The truth is he’s kicked welfare reform into the long grass and won’t touch it til next year.”
Valentin Boboc, Senior Economist with the Institute of Economic Affairs, said: “The Chancellor should use next month’s Budget to cut taxes, bring down energy costs and remove the barriers holding back investment and growth.”
