Chancellor John Healey has made cutting welfare spending a central promise of his Budget, telling Labour’s annual conference in Liverpool that the best thing to offer young people is “a first job with training and a wage,” not a benefit payment.
He said the move was “more than an economic must – it’s a moral duty.” Healey faces pressure to cut public spending or raise taxes ahead of next month’s Budget, and he promised all government promises would be “built on the rock of fiscal discipline,” with him and Prime Minister Andy Burnham “united on meeting the fiscal rules.”
Healey’s Plan for Jobs
The centrepiece of his pitch is the Local Apprenticeships Service, which he announced would be expanded for English mayors. The service will deliver thousands more apprenticeships for young people, with an extra £100m going into the scheme, fully funded by savings from the Department for Work and Pensions’ crackdown on fraud.
England’s mayors can now use the service, which began as a pilot but has since opened up to anyone running an English city. The rollout begins in March 2027, and mayors hold the authority behind it because “they know which firms are hiring, which colleges are delivering, which estates have been left behind.”.
Rolls Royce committed to putting an extra £300m into its British factories in Derby, Bristol, Glasgow and Rotherham, according to Healey’s announcement. He also revived the Union Learning Fund in England, which was created in 1998 and later removed by the Tories, though the fund’s financing was not yet settled at the time.
The Welfare Argument
Healey cited the million young people not in education, employment or training (Neets). He said benefits should be a bridge into work, not a “trap,” and argued that “it is not progressive to allow a bigger and bigger benefits bill, and a system which offers an income but doesn’t offer a future.”
He admitted “the money New Labour had in the ’90s is simply not there now” and blamed the Conservative Party’s time in government for leaving Britain spending more on debt than on the Home Office, Ministry of Defence and Ministry of Justice combined.
The Tory Response
Andrew Griffith, Shadow Chancellor, replied with a reference to both “Labour MPs will never support cutting the out-of-control welfare bill” and “with Labour, it’s always more taxes if you work and more benefits if you don’t.”.
The Numbers Behind It
- Extra £100m for the Local Apprenticeships Service, fully funded by DWP fraud crackdown savings
- Apprenticeships delivered through English mayors, rolling out from March 2027
- Rolls Royce investment: £300m more into Derby, Bristol, Glasgow and Rotherham factories
- Neets: one in eight people aged 16 to 24, per a major report by former minister Alan Milburn expected to set out recommendations
- DWP fraud crackdown savings fully funding the extra £100m
What Healey Hasn’t Settled
Healey said he “won’t set a timeline” for the UK’s benefits bill coming down before the next election. He said reducing the number of Neets cannot be done “overnight.”
When asked several times by BBC Radio 5 Live’s Matt Chorley, he declined to commit to the pensions triple lock being in Labour’s next manifesto.
The Money Question
Helen Miller of the Institute for Fiscal Studies told the BBC that fiscal rules alone would not reduce debt because it is “basically a promise to get down debt tomorrow.” She suggested reducing the benefits bill, including removing support from some people, could cut national debt sooner.
The Local Apprenticeships Service links mayors with local hiring needs, resting on a narrow claim that cutting welfare is both a moral duty and a fiscal rule. The Tory answer instead frames those cuts as a danger to workers, not as a way to balance the budget.
Healey’s position is clear: he wants jobs over handouts, apprenticeships over payments, and fiscal discipline over new spending. Whether that holds against the next election is a question he won’t settle.
The government is investing an additional £100m in the Local Apprenticeships Service, paid for by money recovered from fraud within the Department for Work and Pensions. English mayors will deliver apprenticeships under the scheme, with delivery beginning in March 2027. Rolls Royce has committed £300m to expand its operations at factories in Derby, Bristol, Glasgow and Rotherham. One in eight people aged 16 to 24 falls into the category of Neets, according to a report from Alan Milburn. The fraud crackdown within the Department for Work and Pensions fully covers the extra £100m for the apprenticeships service.
The government is putting up an extra £100m to fund the Local Apprenticeships Service. Apprenticeships will be run by English mayors. Rolls Royce has committed a £300m investment into British factories. A report from Alan Milburn on Neets is expected soon.
Where the paper stands
The paper backs giving citizens a direct say in how cuts to welfare spending are spent elsewhere, and is against those cuts simply vanishing into a budget nobody voted on line by line. Healey’s plan rests on a narrow claim that cutting welfare is both a moral duty and a fiscal rule, but the plan itself leaves the savings unaccounted for beyond the headline figure.
The paper’s position is that when the wealthy pay more, citizens should get a far more direct say in where that money goes than today’s system gives them. That principle applies here too, even when the cut comes from savings rather than higher taxes.
The reader should watch for whether the savings actually arrive as promised, and whether they are spent where the public can see them, not buried in a budget line somewhere else. The paper wants the public to know exactly what happens to the money and how it gets used.
Source material: “Best thing we can offer young people is a job, not benefits, says chancellor,” the BBC.
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