Chancellor John Healey has stepped back from committing to cut the cost of welfare during this Parliament, The Guardian reports, as economists warned his first budget leaves a large hole in the public finances.
The Institute for Fiscal Studies said Healey would have needed to find an extra £28bn a year to cover inflation's effect on future spending and to reach defence spending of 3 per cent of GDP by 2030. IFS director Helen Miller said the next spending review could prove brutal for some departments.
Healey initially appeared to say the benefits bill would fall before the next election, but Treasury officials said he had not meant to give a timeline. He later told Channel 4 no timetable had been set, pointing instead to forthcoming reviews by Alan Milburn on youth employment and Stephen Timms on disability benefits.
Source: The Guardian
