Andy Burnham and Chancellor John Healey have received an update on planned welfare changes across the Department for Work and Pensions (DWP). Mr Burnham, who became Prime Minister following Sir Keir Starmer’s departure, has stated his intention to “get serious” about reducing the welfare bill while explicitly ruling out “crude” cuts.
The Chancellor, Mr Healey, who was appointed as part of Mr Burnham’s first Cabinet after replacing the former Chancellor at Number 11 Downing Street, is set to present their inaugural Budget this October. The Autumn Statement has been scheduled for 28 October.
In anticipation of the statement, Mr Burnham has emphasised tackling the cost of living as a key priority, promising targeted support for struggling households. Measures introduced so far include a £2 cap on bus fares, a reduction in VAT on energy bills, and additional assistance schemes.
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However, The Times has cautioned the government over the financial challenges posed by these commitments. The newspaper editorial highlighted that “cutting welfare spending is the only course to lower public debt,” particularly as inflation and rising global interest rates continue to strain living standards – concerns that Mr Burnham and Mr Healey have pledged to alleviate.
Inflation reached 2.9% in July, presenting a significant hurdle for the Prime Minister as he seeks to protect consumers from further cost of living pressures this autumn. Adding to the complexity, Liliana Danila, chief economist of the Food and Drink Federation, noted ongoing supply chain disruptions alongside geopolitical uncertainties and extreme weather, all contributing to higher prices for key ingredients. She remarked, “This makes it increasingly difficult for food manufacturers to shield consumers from price rises and protect their own resilience.”
Trade Union Congress general secretary Paul Nowak echoed concerns about rising costs, particularly energy bills, urging more government intervention. “With inflation ticking up because of rising energy bills – and no end in sight to Trump’s illegal war in Iran – we are going to have to see more government action to support households in the coming months,” he said.
These warnings follow Mr Burnham’s commitment during his first full interview as Prime Minister to seriously tackle welfare spending. “We’ve got to get really serious as a country [about] getting the welfare bill down,” he told the BBC.
The welfare benefits bill continues to grow, with over eight million people now confirmed as Universal Credit claimants. Parallel to these developments, two reviews of the benefits system are underway: the Milburn Review, led by Alan Milburn focusing on young people not in education, employment or training (NEETs), and the Timms Review, examining Personal Independence Payment reforms.
As the government prepares for the Autumn Statement, balancing support for households with efforts to control public spending remains a key challenge for Mr Burnham and Mr Healey.