Healey's first Budget expected to target energy bills and defence
John Healey will deliver his first Budget as Chancellor on 28 October. The government has promised not to raise income tax, national insurance or VAT, the value added tax charged on most goods and services.
The Budget is expected to target cost-of-living support at the most vulnerable, with energy bills a particular focus, BBC News reported. Pressure on the Chancellor has been building. The Guardian reported in October that millions of people face a 4% rise in energy charges, and that Healey is under growing pressure to offer fresh energy support for households.
In his growth speech on 7 September, Healey said inflation had hit 11%, increasing the cost of living and the cost of business. GOV.UK published the text of that speech.
On energy, Bloomberg reported on 25 October that UK businesses are optimistic Healey will remove levies, the charges included in energy bills, but that the cost of doing so would move back onto bills in 2029-2030. Banks, meanwhile, are braced for a levy or surcharge that may pay for the cost-of-living support, the BBC said.
Reuters reported that Healey is set to deliver a cautious first Budget, prioritising stability in the bond market, the market in which the government borrows money. A Reuters Breakingviews commentary said the UK faces a £10 billion fiscal hole, a gap in public finances, created by the Iran crisis ahead of the Budget.
The Budget will include an announcement on further defence spending. Detail on spending 3% of national income on security by 2030 will come in next year's Spending Review, the process in which departments' budgets are set.
Devolution of power away from Westminster will also be central to the Budget. Healey told BBC Newscast there will be "a really radical devolution of powers and resources to local leaders". He has said he wants the Budget to offer "breathing space and hope".
Earlier this year, Prime Minister Andy Burnham announced a cut to VAT on household electricity. Healey said the cut would be funded by cancelling the digital ID programme. A government announcement said the removal of VAT from electricity bills started in October and takes around £45 off household energy bills.
