After a chaotic day of budget announcements, Chancellor John Healey said tonight he will not lower welfare spending before the next election.
He began the morning insisting that handouts would be reduced this parliamentary term, but later acknowledged that such cuts were not feasible.
His initial pledge was later contradicted by his own aides and even rejected by Downing Street.
Economists warned that the budget leaves a £28 billion funding gap between meeting defence spending goals and avoiding cuts to Whitehall departments.
Britain's annual welfare bill is projected to reach £431 billion by 2031, yet on Wednesday Healey told voters a system overhaul would come later.
In a BBC breakfast interview yesterday, he was asked whether total welfare spending would fall before the 2029 election. He answered, "There will be a reduction in the benefits bill. We'll do that in a Labour way."
Following his remarks, Treasury sources tried to downplay the commitment, saying he had not made a firm pledge.
At lunchtime, No10 clarified the government would not set an "arbitrary target or timetable" for cutting the welfare bill.
Prime Minister Andy Burnham said he wants welfare cuts "as soon as possible" but declined to give a date.
Healey completed the reversal later, telling Channel 4, "It's not correct to say that we are going to bring this welfare bill down in this Parliament because we've not set a timetable for that."
Reform UK's Robert Jenrick told The Sun, "Benefits Burnham can't say when he'll make savings to the spiralling bill, so taxes will have to go up to pay for his cowardice."
He added, "The Chancellor has been utterly humiliated by his handlers in the Labour Party. You can change the Chancellor but you will never change the Labour Party's addiction to benefits spending."
Shadow Chancellor Andrew Griffith called the back-track "unbelievable", noting, "This morning, the Chancellor said the welfare bill would be cut before an election. Now he's being slapped down by Number 10."
An ally who accompanied the PM on a visit to the Rolls-Royce factory in Derby told The Sun, "Healey has kept both the markets and the Labour Party on side. If that's not a Labour budget to be proud of, then I don't know what is."
Polling by More in Common shows voters across the spectrum view current welfare spending as unsustainable, including 51 percent of Labour supporters.
The Institute for Fiscal Studies warned that pressures on public finances could add £17 billion to the £11 billion already required for existing defence plans.
IFS chief Helen Miller said, "We should all hope John Healey has more than hope up his sleeve when the time comes to settle the next spending review."
After presenting the budget, Healey joined Treasury staff for a traditional pint at a Westminster pub, drinking a beer called Chancellor's Choice.
