Plans to cut benefits for young people by helping them back to work will take 10 years to complete, The i Paper understands.
It comes after the Chancellor, John Healey, faced a day of criticism over the lack of measures to cut the burgeoning welfare bill in the Budget, and was forced into as series of clarifications over whether or not there would be cuts to the ballooning benefits bill in this Parliament
Andy Burnham was drawn into the row after Healey appeared to tell the BBC’s programme there would be cuts by 2029 only for the Treasury to backtrack. In the evening, on , Healey said there would not be cuts.
How all over 16s could need ID to use social media
Ofcom has set out its recommendations for the most effective ways to identify which of the UK’s millions of social media users are aged over 16.
What you need to know
Under the UK’s social media ban – which comes into force in March next year – under 16s will be prevented from accessing 10 of the biggest platforms, including Instagram and TikTok.
Many adults are also likely to have to confirm that they are not under-age by using one of the proposed measures,
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Ofcom’s recommendation
Age verification below 18 is difficult, because 16 and 17 year olds don’t have credit cards or full driving licences, and may not have passports.
To address that challenge, Ofcom has recommended four methods that it says would be “highly effective” at gauging people’s ages, in addition to traditional forms of ID.
The four methods
- Photo ID matching, where relevant information on a photo ID is checked against a live image.
- Banking-based checks – using the information on record regarding a user’s age.
- Face age estimation technology, which Ofcom argues has recently improved.
- Digital ID services, which enable people to digitally prove who they are or provide information about themselves, such as their age.
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Why Toblerone owner is suing vegan chocolate brand
The owner of Toblerone is taking legal action against a small British vegan chocolate brand which it claims has been copying the Swiss chocolate bar’s iconic shape.
What you need to know
- Mondelēz has filed papers at the high court accusing Catherine’s Original’s of “passing off” and trademark infringement with its O’bar.
- The O’bar is a length of chocolate divided into segments each with a rounded semi-oval hump.
Catherine’s Originals, founded by Catherine Dodd in 2021, makes its chocolate in Sussex and sells them via markets and online.
- Mondelēz International said: “The iconic Toblerone shape is one of the most recognised and distinctive product designs in the UK and across the world, and has been a hallmark of the brand since 1929.
- “We have a responsibility to protect our trademarks and intellectual property, which we take seriously.”
- The legal battle comes after Poundland was forced to delay the launch of its Twin Peaks bar in 2017 after a legal warning from Mondelēz.
What O’bar founder has said
We stand firmly behind the product and identity we’ve created. We strongly disagree with the claim concerning O’bar and are working with our legal team to defend our position. Honestly, it’s fairly frightening for a small business we’ve put so much care and hard work into building.
catherine dodd
The tax rises Healey didn’t tell you about
In John Healey’s Budget he promised to make Britain “more resilient” to global shocks and pledged to give families a £100m payment to help with energy costs, and offer a tax break for low income pensioners.
But the Office for Budget Responsibility (OBR) has warned living standards will be challenged by higher energy costs and a ballooning tax burden. Here are all the hidden tax rises in Wednesday’s Budget.
Energy bills
The Chancellor announced a series of pledges to curb rising energy costs, promising the beginning of “radical reform”.
This includes a £100 payment towards energy costs for up to 20 million households in council tax bands A to D.
However, these fixed daily charges on gas bills will be shifted onto the price consumers pay for each unit of energy.
Energy bills
The Treasury has claimed that 60 per cent of households will save an average of £45 a year.
But the savings will only come after the big projected rise to energy bills in January. While lower users will gain the most, higher users – which includes large, low-income families – are likely to pay more than they currently do.
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High tax bands for millions
- Millions face being dragged into paying more income tax after the thresholds remained frozen.
- The IFS warned it was a Budget with “very little that will move the dial on growth”.
The effect, known as fiscal drag, occurs when tax thresholds remain frozen while wages rise – meaning people pay more tax as a greater proportion of their income becomes taxable or they are pushed into higher tax bands.
Middle-income pensioners
- Pensioners with income less than the full amount of the new state pension will not have to pay income tax, Healey announced.
- However, middle and higher income pensioners face a squeeze due to related tax rules.
- Healey said that to avoid a “cliff edge” once a pension income exceeds the allowance, the Government would “gradually” reduce the allowance as income increases.
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Middle-income pensioners
- The Government said this means those earning between £13,037 and £13,319 will receive “some Pension Tax Allowance and pay less income tax than you otherwise would”.
- But Sir Steve Webb, former pensions minister, said this means around 200,000 low-income pensioners will face a marginal income tax rate of 53 per cent.
- For each extra pound above the cut-off, they pay 20p in income tax and lose 33p in the tax rebate that those on lower incomes get, he said.
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READ THE FULL STORY HERE
Higher housing costs
The Chancellor announced that the surcharge on bank profits would be temporarily doubled from 3 to 6 per cent and that landlords face a 4 per cent tax on rental profits and property income.
But critics are warning higher costs will be passed onto renters and onto people securing mortgages.
“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.”
Earlier, the Prime Minister had said he wanted to cut the benefits bill “as soon as we possibly can” while No 10 said: “We’ve never set an arbitrary target or timetable on that.”
Burnham wants to cut the welfare bill in a “Labour way”, which means by bringing people back into work rather than by “crude cuts”. But the latest row comes a year after his predecessor, Sir Keir Starmer, was forced to abandon welfare cuts and risks several more years dominated by the issue but with little or no inroad into the problem.
The Milburn review
Labour grandee Alan Milburn’s review into 16- to 24-year-olds not in employment, education or training – so-called Neets – is understood to set out plans for 10 years of change to bring down the high cost of unemployment in young people, The i Paper understands.
The former cabinet minister’s review is expected to find savings but insiders say for Millburn’s reforms to be successful, benefit claimants will need wholesale support.
It comes as the Institute for Fiscal Studies (IFS) told The i Paper that a boost to work support will not make savings for five to 10 years and would be expensive in the short term.
This is despite warnings from the Office for Budget Responsibility (OBR) – the UK’s financial watchdog – that the benefits bill is on course to exceed the Government’s welfare spending cap and its permitted margin by £2.8bn in 2029-30.
Eduin Latimer, senior research economist at the IFS specialising in welfare, said breaching the cap “doesn’t have any forcing effect on Government policy” and that the bigger issue driving policy is rising spending.
“One area where the Government might want to try and find some extra savings – which they might be able to use elsewhere – would be cutting benefit spending,” he told The i Paper.
The OBR points to rising numbers claiming health-related and in-work benefits as key pressures on spending. The number of people on incapacity benefits has risen from 2.5 million in 2019-20 to 3.7 million in 2025-26, while the disability benefits caseload in England and Wales has increased from 4.7 million to 6.9 million.
The welfare bill is projected to hit £353bn this year, a rise of £19bn, and forecast to rise to £431bn in 2031-32 according to the OBR, with just under half of this spent on pensions.
The Conservatives accused Labour of being “addicted to welfare”, while Reform UK said the Budget did not address the “ballooning” benefits bill.
The Milburn review is expected to be published next month, along with Sir Stephen Timms’s report on the “failures” of the disability benefits system. Healey said he would respond with a White Paper early next year with legislation to follow.
This means any effective action may not happen until 2028.
The Chancellor said the Government will bring the benefits bill down in a “Labour way”.
“We will make changes and we’ll make the changes before the next parliament that will help us in the longer term get these million youngsters a chance in life and off benefits,” he told Channel 4.
The reforms to universal credit (UC), first proposed by former coalition-era Tory work and pensions secretary Iain Duncan Smith in 2010, ended up taking 15 years to complete with the final claimant moving from older benefits earlier this year.
Insiders expect Milburn’s reforms to take a decade to fully implement, but savings are expected to be made in the interim.
‘Two types’ of possible savings
Latimer, of the IFS, said if the Government was to make savings immediately, it would have to restrict disability benefits known as personal independence payments (PIP) and UC for under-25s.
He said there are “two types of savings” the Milburn package could include. The first would be cutting eligibility for benefits, such as restricting the health element of UC for young people, which has seen a huge rise in claimants since 2019.
“If they did that, they could in theory make savings basically immediately,” Latimer said.
The second mechanism is long-term intervention to boost employment support for young people. Latimer said this would probably require “upfront spending” and it is “more uncertain” how it would affect finances in the long run – but it is likely to take “five to 10 years” to make savings.
Latimer said Milburn’s employment support package “could pay off in the long run if it does succeed in getting more young people into work”, but noted this is “not guaranteed” as the results of previous schemes have been “mixed”.
The i Paper understands there is last-minute wrangling across government departments over the Milburn review to ensure the report can be accepted in full when it is published.
The report is expected to cut across multiple departments, including the Department for Work and Pensions, Education and the Business brief. Ministers are understood to be dovetailing Millburn’s requests against their departmental priorities and existing programmes that tackle youth joblessness.
The new youth participation service will be designed to help youngsters plan their futures and prevent them from becoming “Neets”.
A DWP spokesperson said: “We are already reforming the welfare system across the country by narrowing the gap between universal credit standard and health rates, restoring face-to-face assessments, and investing £3.5bn in employment support to end the culture of people being signed off and written off.
“This comes alongside our £2.5bn investment in youth employment over the next three years to support almost one million young people and help deliver up to 500,000 opportunities to earn and learn.”