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John Healey has announced a £100 payment for millions of households to help with energy bills this winter in his autumn Budget.
The chancellor said around 20 million households in council tax bands A to D will get the payments into their bank accounts, with the support costing £2.6 billion.
The payment comes with a cut to VAT on electricity being extended to July, taking £50 off the annual price cap.
Delivering the measures in his speech to the Commons, Mr Healey said: “Let me say this to families at home. I know that with the conflict in the Middle East, rising energy bills are a real worry. I know that people look to Government at times like this, not to solve all their problems, but to give them a bit of breathing space.”
The chancellor has also said he is sticking with the fiscal rules set by predecessor Rachel Reeves, requiring day-to-day spending to be financed by taxes rather than borrowing.
Meanwhile, Mr Healey said The Office for Budget Responsibility had cut its forecast for GDP growth next year to 1 per cent, down from its previous forecast of 1.6 per cent, while upgrading the growth outlook for this year from 1.1 per cent to 1.2 per cent.
Read MoreKey takeaways from Budget 2026 from taxes to bills help
Which council tax bands are eligible for £100 Budget energy payment?'
What the Budget will mean for pensions and income tax
Key Points
- Millions of households to get £100 to help pay energy bills
- Healey says he won’t raise tax on working people
- Chancellor slashes fiscal headroom from £23bn to £15bn
- Analysis: Healey sticking to Rachel Reeves’ borrowing rules
- In blow for Healey, OBR downgrades economic forecast
- All the key measures announced by Healey in Budget so far
Healey pledges £10bn further support for Ukraine
13:24 , Joe MiddletonBritain will commit £10 billion of additional economic and military support to Ukraine, and half a billion in urgent military funding this winter, John Healey said.
Healey: 'We will bring down the welfare bill in a Labour way'
13:22 , Joe MiddletonPolitical correspondent Millie Cooke reports:
John Healey has vowed to "bring down the welfare bill" in a "Labour way", accusing the last Conservative government of "writing off a million young people".
However, proposals to cut the welfare bill, he said, will come later this year.
The chancellor told the Commons: "When it comes to welfare, the last Conservative government left a broken system, which we are changing."Bringing back the face-to-face assessments. Rebalancing Universal Credit so it doesn’t force people to label themselves as too sick to work. Reforming Motability, and clamping down on those living abroad from accessing a UK State Pension on the cheap."
He added: "But there is more to do. I refuse to write off a million young people, like the last Conservative government. I refuse to see disabled people suffer the indignities of a system that has been found ‘not fit for purpose’, And I refuse to allow the burden of paying for this failing system to fall on taxpayers for decades to come.
"As the Prime Minister and I have both said, we will bring down the welfare bill, and we will do it in a Labour way."
Madam Deputy Speaker, Alan Milburn and the Timms panel will publish their final reports next month. This government will then set out our response before the end of the year, with a White Paper and legislation to follow next year."
Healey has opened the door for tax competition in the UK
13:18 , Joe MiddletonPolitical editor David Maddox reports:
John Healey has bitten the bullet on devolution and started the process of devolving taxes to regions and localities.
It is very much in the philosophy of prime minister Andy Burnham who has made devolution his defining issue. But by handing income tax receipts to mayors and sending business rates to localities he is opening the door to tax competition.
Currently plans are unlikely to see mayors and councils cut rates but once the principle is established pressure will mount for them to be allowed to do that.
Once the door is opened then tax competition and a race to the bottom becomes a serious possibility as regions compete with one another to bring in wealth and investment.
Watch: Healey hits out at Liz Truss ‘blowing a black hole’ in the British economy
13:14 , Joe MiddletonAll the key measures announced by Healey so far
13:12 , Alex RossJohn Healey opened his Budget statement by saying he wanted to give Britain some breathing space on the cost of living and the cost of business.
Here are the key measures announced so far:
- Around 20 million households will get £100 from the Government this winter to help with energy bills
- The cut to VAT on electricity will be extended to July, taking £50 off the annual price cap
- The 5p fuel duty cut has been extended until July 2027
- Gambling machines duty will rise from 20 per cent to 25 per cent
- Banks to face a temporary rise in surcharge, currently levied at 3 per cent on top of the 25 per cent corporation tax rate, by an extra 3 per cent
- National minimum wage and national living wage to increase by 3.9 per cent
- The tax threshold for small business rates relief for retail hospitality and leisure businesses to increase from £12,000 to £18,000.
Bank tax to pay for household energy bills
13:09 , Joe MiddletonWhitehall editor Kate Devlin reports:
The chancellor said the UK’s world-leading banks “make a huge contribution to this country, In the tax they pay. In the jobs, industry and investment they support”.
He added that he was “grateful for the role" they play.
But he added that with the current global economic storms, he was looking to them to help fund breathing space for British families.
He announced an “extra 3 per cent on the Bank Surcharge” which he said would be time limited - and used to pay for immediate support on energy bills.
Starting in January, it is due to end after 15 months.
In blow for Healey, OBR downgrades economic forecast
13:08 , Joe MiddletonThe Office for Budget Responsibility has upgraded its GDP growth forecast for this year from 1.1 per cent to 1.2 per cent, but that is where the good news ends for John Healey.
Next year the watchdog has cut its growth forecast from 1.6 per cent to 1 per cent.
This is partially to do with the ongoing energy crisis caused by the war in Iran.
However, Mr Healey noted at the start of his address that the UK still has the fastest growing economy in the G7.
The OBR does show a slight recovery to 1.6 per cent in 2028 and then 1.7 per cent in 2029.
Analysis: This really is the cost of living Budget
13:03 , Joe MiddletonPolitical editor David Maddox:
There are lots of small announcements such as £100 off energy bills for the lowest council tax bands and extensions to fuel allowance.
And while much of this seems small beer they collectively are very helpful for people at the sharp end of the low income problem in this country.A bit like taking VAT off energy bills when Andy Burnham became PM these are all signals that this Labour government is on their side which provides a little bit of help.
They will not do much to seriously change people’s lives but, as Mr Healey notes, they provide breathing space.He will go after less popular sectors like the banks and gambling firms to help balance the books and stick to the fiscal rules.
But this was always going to be a delicate balancing act for a chancellor who had very little money to play with.As he noted the cost of borrowing had already been hit by the war in the Middle East which has also increased inflation.
What he has done though is provided security and hope for a country which is nervous about the current economic climate.
Dolly Parton charity gets funding
12:58 , Joe MiddletonWhitehall editor Kate Devlin reports:
Two months after she passed away Dolly Parton got a shout out in the Budget.Or rather, the charity she founded, the Dolly Parton Imagination Library, did.
The chancellor announced £15m would go to organisations like the Library and BookTrust “who give books to children”.
Launched in the UK in 2007, the charity says it has sent more than 7 million books to children in Britain.
20m households to get £100 to help pay energy bills
12:56 , Joe MiddletonPolitical correspondent Millie Cooke reports:
Some 20 million households in council tax bands A to D will get £100 to help pay their energy bills as part of the chancellor's measures to tackle the cost of living crisis.
The Household Energy Payment will cost £2.6billion and will be paid directly into people's bank accounts to help deal with rising bills to "take the pressure off in the coldest months and see people through to the Spring."
Healey extends energy bill VAT cut
12:55 , Joe MiddletonWhitehall editor Kate Devlin reports:
Earlier this year in one of his first acts as PM Andy Burnham cut VAT on energy bills.
Now the chancellor has kept that going until next summer.He said: “In the first week of this new government, we took VAT off electricity for 29 million households.
“Today I’m extending that VAT cut through the winter and spring to July, taking £50 off the annual price cap.”
Healey hits out at Liz Truss ‘blowing a black hole’ in the British economy
12:46 , Joe MiddletonPolitical reporter Athena Stavrou:
The chancellor has criticised former prime minister Liz Truss over her disastrous mini budget and her new book.
John Healey said the IMF has said Britain now “stands out” on its action to “reduce the debt and deficit”.
He said the last time this happened was when Liz Truss crashed the economy."Her new book claims she could have taken the British people to Mars," he said.
"In reality, what she achieved in government – helped by the shadow chancellor – was blowing a black hole in the budget.“That is the difference between a Conservative government and a Labour government.”
Healey says he won’t raise tax on working people
12:45 , Joe MiddletonWhitehall editor Kate Devlin reports:
The chancellor says he will use some of the Treasury’s ‘headroom’ to absorb part of the impact of the Iran war.He told MPs that would protect the economy and protect family budgets.
He added: “My choices in this Budget mean I have kept the Labour manifesto promise not to raise tax on working people.”But this led to jerring from opposition MPs.One of the central pledges of the Labour’s 2024 manifesto was to not raise taxes on “working people”.
But ex-chancellor Rachel Reeves faced accusations she did just that last year by freezing personal tax thresholds until 2031.
John Healey slashes headroom from £23bn to £15bn
12:44 , Joe MiddletonPolitical correspondent Millie Cooke reports:
John Healey has reduced the fiscal headroom from £23bn to £15bn."The OBR confirms today that headroom against the stability rule is £15bn in 2029/30, before rising to £22bn in 2030/31", he said. "That’s what a buffer is for. Use it when you need it. Rebuild it when you can."
He added: "And so, despite the global challenges, this Budget puts us on track to eliminate the current budget deficit and get Britain’s finances into the black within 3 years."
Analysis: Healey sticking to Rachel Reeves’ borrowing rules
12:43 , Joe MiddletonPolitical editor David Maddox:
John Healey wants to keep the gilt markets calm over the level of borrowing especially after he confirmed that the interest payments on UK debt has risen £14bn largely as a result of the Middle East war.
It means that the new chancellor has confirmed that he will “stick to the fiscal rules” which were set by Rachel Reeves when she was chancellor in an attempt to ensure that the markets do not panic and prevent the UK from defaulting on its debt.
This is despite huge pressures to spend more especially on defence and welfare.Instead Mr Healey has confirmed that he will pay off debt over the next three years.
£14bn more to be spent on debt interest, OBR predicts
12:42 , Joe MiddletonPolitical reporter Athena Stavrou reports:
John Healey has said that Britain will spent £14 billion more on debt interest this year, according to the OBR’s predictions.
Highlighting the economic impact of conflict in the Middle East, he said government borrowing costs across the G7 “are reaching highs not seen for decades”.
“In today’s forecast, the OBR predict that we will spend £14bn more on debt interest this year,” he said.“Those are the storms we face. We can’t wish them away. We must choose the course we steer through them.”
John Healey warns of 'economic storms' from Iran war
12:40 , Joe MiddletonPolitical correspondent Millie Cooke reports:
As he opened his first Budget, John Healey has warned that Britain is facing "economic storms" as a result of conflict in the Middle East, the Ukraine war and global trade tensions.
The chancellor told the Commons: "Madam Deputy Speaker, analysts like to speak of economic headwinds. But what we face today are global economic storms… …with trade tensions acting as a drag on global growth, and Putin’s illegal invasion of Ukraine approaching the end of its fifth year.
"The OBR sets out that the war in the Middle East is a key driver affecting today's forecasts. And this government continues to work with our allies to end the conflict and restore shipping through the Strait of Hormuz.
"Madam Deputy Speaker, we did not want this war… …and we rejected the calls from the Leader of the Opposition to jump two-footed into it. It’s a war that has driven up costs on British families and businesses: Inflation, which was due to fall earlier this year to the 2% target, has now risen, driven by higher oil and gas prices, Oil is up from around $70 a barrel to well over $100; and gas prices have nearly tripled since February."
Healey jeered as he pays tribute to Rachel Reeves
12:38 , Joe MiddletonPolitical reporter Athena Stavrou reports:
John Healey has paid tribute to his predecessor Rachel Reeves as he begins to deliver his first Budget.
He said: “At the outset, I want to pay tribute to my predecessor, my Right Honourable Friend the member for Leeds West and Pudsey.”
"The address was met by loud jeers from opposition benches, but he added: “Britain’s first ever female Chancellor, after 800 years.“She brought fiscal discipline to this country, And she took the decisions required to boost investment, cut NHS waiting lists and lift half a million children out of poverty."
Healey declares a Budget for business and working people but warns of ‘global uncertainties’
12:37 , Joe MiddletonWhitehall editor Kate Devlin reports:
John Healey did not shy away from the challenges affecting his Budget, two weeks after he warned of the “tough” circumstances behind it, including the war on Iran.
He began his statement by telling MPs it was a “Budget for the working people of Britain.
It’s a Budget for business, big and small. Delivered at a time when global uncertainties and pressures are swirling worldwide and hitting people here in Britain."
“A Budget built on fiscal discipline… …which matches immediate action today, with clear direction for the future”.
Pictured: Healey delivering his first Budget
12:35 , Joe Middleton-copy.jpeg)
BREAKING NEWS
12:32 , Joe MiddletonThe chancellor John Healey is on his feet and delivering his first Budget.
Watch: Burnham told to rejoin EU customs union and single market to boost growth
12:28 , Joe MiddletonBurnham told to rejoin EU customs union and single market to boost growth
12:21 , Joe MiddletonPolitical reporter Athena Starvou reports:
Ed Davey has urged Andy Burnham to consider rejoining the EU’s customs union and single market in order to boost growth.
The Liberal Democrat leader told the prime minister to act in order to improve the cost of living by using dividends of growth to cut people’s taxes.
Mr Burnham has ruled out such a move within this parliament in order to avoid a breach of Labour’s 2024 manifesto, but said he will “take pragmatic steps where we can to improve British business”.
He went on to accuse the Conservative’s of having “turned their back” on British businesses, after Kemi Badenoch grilled him on his Brexit comments.
He said: “They claim to be party of business, they turned their back on them today. This party never will.”
Badenoch accuses Burnham of going back on his promise not to rerun Brexit referendum
12:15 , Joe MiddletonPolitical correspondent Millie Cooke reports:
Kemi Badenoch has accused Andy Burnham of going back on his words after he promised not to rerun the referendum when he was trying to win the Makerfield by-election.
Pointing to his promise during the crucial poll, Mrs Badenoch said: "Does he still agree with himself?"She also asked Labour backbenchers to give a "show of hands" for "who supports free movement".
Joking about the lack of hands in the air, the Tory leader said: "I know he doesn't want to look behind him"
Analysis: Kemi Badenoch may not be on a winning ticket supporting Brexit
12:13 , Joe MiddletonPolitical editor David Maddox:
The Tory leader Kemi Badenoch has decided to attack the prime minister on his plans to reverse key aspects of Brexit.
While she had to pick a non-economy subject on the day the Budget her decision to pin her colours to the mast of defending the Brexit status quo could be problematic.
While the ins and outs of the debate are one thing is it is clear that the path for a Tory comeback are in the south of England and London, areas where support for rejoining the eU is strongest.
She will struggle to “out-Brexit” Nigel Farage who built his political career on the issue. She will struggle to take on Reform in other parts of the country.
Watch: Burnham pays tribute to Spain victims after high-speed rail collision in Toledo
12:11 , Joe MiddletonBurnham questioned on EU referendum
12:09 , Joe MiddletonPolitical reporter Athena Stavrou reports:
Kemi Badenoch has opened her line of questioning this week by grilling the prime minister on his position on the EU.
The Tory leader asked Andy Burnham to clarify the “confusion” on his position on rejoining the EU, asking him whether he wants a referendum.
But the prime minister insisted there is “no confusion at all” over his position, arguing he has been “entirely consistent”.
He confirmed Labour’s manifesto promise to not reopen freedom of movement with the EU would remain in place until the end of this parliament, but said the Brexit deal has been “bad for growth and bad for control for immigration”.
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Badenoch kicks off her questions by questioning Burnham's EU position
12:08 , Joe MiddletonThe Tory leader has accused the prime minister of having a ‘confused’ policy on Brexit.
She questions if Mr Burnham wants a future referendum on Brexit or not?
Mr Burnham retorts that his position is clear and his predecessor Keir Starmer’s red lines on the EU and Brexit have not changed.
Burnham praises England captain Harry Kane
12:05 , Joe MiddletonThe prime minister began PMQs by praising Ballon d'Or winner and England captain Harry Kane.
BREAKING NEWS
12:01 , Joe MiddletonAndy Burnham is on his feet for PMQs.
John Healey will already have outperformed three predecessors
12:00 , Joe MiddletonPolitical editor David Maddox:
When John Healey stands up shortly to deliver his first Budget he will have already outperformed three of his last six predecessors as chancellor.
While Rachel Reeves gave two Budgets, three of the five Tories before her did not give a single proper Budget.Both Sajid Javid (2019 to 2020) and Nadhim Zahawi (2022) did not give a Budget at all.Meanwhile Kwasi Kwarteng (also 2022) only gave the infamous “mini-Budget” as an emergency financial statement rather than a real Budget which was then cancelled days after he resigned by his successor Jeremy Hunt.
Mr Hunt himself did two Budgets while Rishi Sunak did three before he quit Boris Johnson’s government.
Burnham tells Cabinet Brexit has led to 'low growth'
11:59 , Joe MiddletonAndy Burnham told Wednesday morning’s Cabinet meeting that Britain’s post-Brexit deal with the EU had led to low growth and made it harder to control immigration, insisting the status quo was not good enough.
A readout of the meeting ahead of the Budget provided by Downing Street said: “The Prime Minister opened by setting out how he would shortly write to Cabinet on the UK’s relationship with the EU. He said the Brexit deal left by the last government had been bad for the UK and had led to a harder Brexit than had been promised at the referendum.
“The Prime Minister said the deal had led to low growth and also made it harder to control immigration. He said the upcoming EU Summit offered the UK the opportunity to forge a closer relationship with the EU, which was good for the British people and good for British business. He added the status quo is not good enough for our country.
“Turning to the Budget, the Prime Minister said the Chancellor would shortly be on his feet in the House. He then asked the Chancellor to update Cabinet on the key measures in the Budget.
“The Prime Minister then asked the Foreign Secretary to update Cabinet ahead of the Commonwealth Heads of Government Meeting, which he and the Prime Minister will attend.”
Watch: Andy Burnham leaves No 10 ahead of Budget announcement
11:47 , Joe MiddletonBREAKING NEWS: Healey leaves No 11 and heads to Parliament to deliver his first Budget
11:34 , Joe Middleton
Analysis: Why bankers may be sceptical that the new tax on profits is ‘temporary’
11:24 , Joe MiddletonPolitical Editor David Maddox:
The higher bank surcharge level is currently being briefed as a “temporary” measure by sources close to chancellor John Healey.
But there are reasons to be sceptical about that from the history of tax in the UK.The higher rate of 50p for people earning more than £150,000 introduced by another Labour chancellor Alistair Darling in 2009 was meant to be "temporary" to deal with the financial crisis and bank bailout.
While it went down to 45p with Tory chancellor George Osborne, it's still in place and extended to people earning £125,000 with no sign of it being removed.
Much further back in 1799 income tax itself was meant to be "temporary" for the Napoleonic wars. As we know it is still here today."Temporary" has a habit of sticking around.
Majority of Britons pessimistic about future of UK economy as 70% expect Budget tax hike, new polling shows
11:12 , Joe MiddletonTwo-thirds of Britons are pessimistic about the future of the UK economy, new polling has suggested, as 70 per cent expect tax hikes in John Healey’s Budget.
Former defence secretary Mr Healey is under pressure to balance the country’s books as he prepares to delivers the first Budget of Andy Burnham’s premiership on Wednesday.
The chancellor is facing calls to ensure Britain’s military spending is ramped up, whilst also ensuring the string of pledges set out by the prime minister during his first weeks in office are fully funded with either tax hikes or billions in savings.
But new polling from IPSOS shows that 70 per cent of Britons believe it is likely the government will raise taxes they pay in the next year, compared with 17 per cent who think it’s unlikely.
Political reporter Athena Stavrou reports:
Two in three Brits pessimistic about of UK economy ahead of Budget
Analysis: Economists split on how much fiscal headroom Healey needs from first Budget
11:09 , Joe MiddletonBusiness and Money editor Karl Matchett:
Economists have been a little split over exactly how much headroom Healey needs to leave to avoid a negative bond market reaction, but £15bn certainly seems to be the absolute floor.
That's also the figure RSM's chief economist Thomas Pugh suggested to me, though a few others, including Blick Rothenberg's Chantal Van Stipriaan, feels it needs to be somewhat higher.
This morning yields on 10-year gilts are up by around 0.25%, though they are still down considerably compared to early October when the actual yields themselves were within touching distance of 5.5%.
What the Budget will mean for pensions and income tax
11:01 , Joe MiddletonThe first Budget under new prime minister Andy Burnham is just around the corner, with households across the country waiting to find out what the planned fiscal changes could mean for them.
Several policy plans have been rumoured in the build up to the event, as the cost of living remains a major concern for many households. Inflation rose to 3.5 per cent in September to mark the highest level in nearly a year, as rising energy costs continue to drive up prices.
It is thought that changes to benefits and pension policy could play a central role as the government looks to shore up its shrinking fiscal headroom and lower welfare spending.
Albert Toth reports:
What the Budget will mean for pensions and income tax
Healey's bank tax rise 'will be temporary'
10:56 , Joe MiddletonThe Chancellor’s bank tax rise will only be temporary, according to reports this morning.
John Healey was widely expected to hike taxes on the major financial institutions in this afternoon’s fiscal statement.
However Bloomberg are reporting that any tax rise for banks will be temporary and come in at a modest 8%.
EXCLUSIVE: John Healey’s bank tax rise will be temporary and come in at less than 8%, Bloomberg understands
— Alex Wickham (@alexwickham) October 28, 2026
The hike is less steep than feared by the City
Story on @TheTerminal with @Joe_Mayes @PhilAldrick
When will the Budget be announced?
10:42 , Joe MiddletonJohn Healey will deliver his Budget to the Commons later today as he outlines the first complete fiscal plan of Andy Burnham’s government.
He is expected to outline the proposals at approximately 12.30pm on Wednesday in the Commons, immediately after Andy Burnham has finished his weekly despatch box showdown with Kemi Badenoch at Prime Minister’s Questions.
We’ll be bringing you analysis and commentary throughout the day from our team in Westminster.
Burnham gets another pre-Budget poll boost
10:22 , Joe MiddletonPolitical editor David Maddox reports:
More in Common has become the third poll in a row to suggest that Labour could win a majority under Andy Burnham.
As chancellor John Healey prepares to deliver his first Budget, the poll puts Labour on 28 per cent comfortably above the Tories on 24 per cent and Reform stuck in third place on 23 per cent.
According to Electoral Calculus the findings of the poll taken between 23 and 26 October would give Labour a majority of 14 if they occurred in a general election.
The support for the Tories sees them return to the level they were at in the 2024 general election when they had their worst ever result.
They have been lagging behind that landmark low for most of Kemi Badenoch’s leadership.
The split on the right suggesting 5 per cent would support Rupert Lowe’s hard right Restore has hit support for Reform UK.
The Greens are at there election level on 7 per cent and Lib Dems on 11 per cent.
Pictured: PM leaves No 10 ready for the chancellor's first Budget
10:17 , Joe Middleton
Watch: Raising taxes is a dangerous way to fund defence, says former chancellor Jeremy Hunt
10:03 , Joe MiddletonHealey ‘to scrap planned cut on cash ISA allowance’ in Budget
09:50 , Joe MiddletonJohn Healey looks set to reverse the planned cut to cash ISA deposits in a move that has been welcomed by industry experts.
Previous chancellor Rachel Reeves unveiled a raft of ISA reforms last year aimed at getting more people in Britain to invest, in a plan though worthy, has been labelled a “car crash” by one expert.
On Wednesday, new chancellor John Healey is expected to U-turn on that move, according to the Financial Times, scrapping that cut, which would have limited people under 65 to putting only £12,000 annually into Cash ISAs, instead of £20,000.
Most industry voices disagreed that the move would push people to invest more, while others said it would have actively hampered building societies who utilise those deposits to back domestic mortgages. The retail investing industry was also split on the move, given the added rules and cost it would add to their processes, even if they naturally agree more Britons should be investing.
Business and Money editor Karl Matchett reports:
Healey ‘to scrap planned cut on cash ISA allowance’ in Budget
What can we expect in the chancellor's first Budget?
09:46 , Joe MiddletonJohn Healey is delivering his first Budget later today against the backdrop of a difficult domestic economic situation, made worse by the international market turmoil caused by the Iran war.
He will have limited scope for big giveaways due to the stretched public finances and significantly reduced headroom as a result of increased borrowing costs.
These are some of the announcements you can expect from the chancellor:
- Scrapping the carers’ allowance cliff edge
- Making a higher tax-free mileage allowance of 55p permanent
- Slashing tariffs on a range of popular foods including chocolate and gherkins
- Extending parental pay to more than 150,000 parents each year
- A rise in the minimum wage by nearly 4 per cent
- More than £600 million for various projects on the development and safe use of AI
- A £7 million fund for a feasibility study into a possible future bid to hold the Olympics and Paralympics in northern England
- An initial £285 million to give mayors and regional leaders in England more money and power to invest in projects in their areas
- More than £1 billion for social and affordable housing
- A further £432 million for the rough sleeping programme
Analysis: Big Budget or small Budget - what are we expecting?
09:38 , Joe MiddletonSenior reporter Alex Ross reports:
It’s just over 100 days since Andy Burnham swept into No 10 with the promise to end “40 years of neoliberal politics and economics” in what our chief political commentator John Rentoul described as a “big, brave speech”.
So in the first Budget since taking the big job, you’d be forgiven for expecting some revolutionary announcements steeped against the private sector.Maybe not.
Chancellor John Healey’s framing of today’s Budget as a “breathing space” package aimed at easing cost-of-living challenges, with a spread of modest give-aways dropped so far, doesn’t quite live up to Mr Burnham’s vision.
Meanwhile, welfare and the setting of fiscal terms appear absent in reports on what will be announced today.
Speaking on the podcast Political Currency, former Tory chancellor George Osborne said: “[If it is a choice to] play it long , get ourselves established, it’s an interesting decision because normally the rule of politics is when you are new, when you have your first Budget, do your big things because your political capital starts to evaporate.”
Watch: Martin Lewis says he expects energy price cap to go up 27% in January 2027
09:28 , Joe MiddletonReaction to Healey's 'Cash ISA U-turn'
09:25 , Joe MiddletonDaniel Hough, Director, Wealth Manager at RBC Brewin Dolphin: “It is interesting to see reporting that the Government is considering reversing the changes to the annual cash ISA allowance, which is currently set to reduce from £20,000 to £12,000 for those aged under 65 from April next year. Our recent research found that less than a quarter of people were both aware of, and able to correctly identify these incoming ISA changes. This change was one of more than 130 changes to personal finance rules announced in Budgets over the last 10 years, and savers will be watching the Chancellor’s announcement closely this afternoon for any further amends to the ISA rules.”
Maike Currie, VP Personal Finance at PensionBee: “Scrapping the planned cut to the Cash ISA allowance would be a welcome U-turn. Saving was never the problem; the challenge is giving people the confidence to take the next step into investing.“We warned at the time that restricting Cash ISAs risked penalising the very people who need the most help building long-term wealth, women in particular. You don’t persuade people to eat more meat by rationing their vegetables."
Analysis: Questions remain over Healey's ISA U-turn
09:14 , Joe MiddletonBusiness and Money Editor Karl Matchett reports:
Reports suggest the unpopular - and very likely ineffective - Cash ISA cut is about to be reversed.
Rachel Reeves signalled Labour's push to get people investing when she was chancellor, a much-needed initiative, but the chosen methodology to try and make it happen was questionable at best.
So, it appears John Healey will make a dramatic U-turn on the plan to cut the Cash ISA limit from £20,000 to £12,000 - but questions still remain.
Presumably, the most hideous aspect of the plan, interest on cash in Stocks and Shares ISA, must now also be scrapped - it should have been anyway, even if the Cash ISA limit wasn't reversed.
But this is a really positive move for building societies too: they utilise Cash ISA deposits to back mortgages, while banks will likely applaud the potential for more cash to remain with them too, as they face a potential additional tax on profits.
Importantly, Healey is still expected to extoll the virtues of educating people about investing, but the attempts to nudge people towards stocks and shares will take a different form now.
Over the longer term, investing can generate higher returns than cash saving alone - and inside a Stocks and Shares ISA, all gains are tax free.
Pictured: Ed Miliband and Shabana Mahmood arrive for pre-Budget Cabinet
09:10 , Joe Middleton
Watch: Martin Lewis dubs standing charges 'poll tax on energy'
08:56 , Joe MiddletonGreens accuse Healey of 'tinkering' over standing charges plan
08:45 , Joe MiddletonThe Greens said chancellor John Healey’s move to scrap standing charges on gas bills amounted to “tinkering”.
A party spokesperson said: “Abolishing standing charges is more tinkering from a Government that is failing to take the bold action needed to end the cost-of-living crisis.
“Energy bills have skyrocketed in recent years and are set to rise by hundreds of pounds again this winter.
“‘Hope’ is an easy thing to promise but will not be delivered by a business-as-usual Budget.”
Government will have to go further on energy bills in January
08:34 , Harriette BoucherMartin Lewis has said the government will have to go further on energy costs in January, when bills are expected to surge by around 27 per cent.
The money expert, who met with John Healey at No 11 this morning, welcomed the scrapping of standing charges, which he has long campaigned for.
But he told BBC Radio 4’s Today programme that scrapping standing charges “isn’t going to bring the materiality of people’s energy bills down.
“We are looking at the 1 January of the energy price cap going up 27 per cent,” he said, adding that an around £100 could be added to people’s bills over the course of three months.
“I think there is going to have to be a support package in place for January.
“I asked the chancellor about that when I met him this morning. I got a read between the lines answer that yes he will be doing it.”
Removing standing charges will 'bring real relief' to low income households
08:28 , Joe MiddletonPolitical correspondent Millie Cooke reports:
The decision to remove standing charges from gas bills will "bring real relief" to low income households, the co-ordinator of the End Fuel Poverty Coalition has said.
Simon Frances said: “It’s also welcome that the Chancellor acknowledges that wider measures are needed to bring down bills and we will wait to see if he matches these words with more action in the Budget later.
“Moving levies off electricity bills and into general taxation, as reported, would also be a positive step.“But despite the positives of the gas standing charges proposal, millions of households won’t see a saving.
“This means ministers have serious questions to answer about who they are and, if they are vulnerable or on low incomes but have high energy needs, how they will be protected.”
