Chancellor to Boost Welfare, Freeze Fuel Duty Amid Economic Uncertainty
John Healey's Budget will reportedly increase tax burden to record levels while slashing food tariffs and raising the minimum wage.
Callum Smith
The Chancellor will not curb welfare spending in the upcoming Budget.
Despite these fiscal realities, the Chancellor will avoid welfare reform, instead boosting handouts to 10 million people. Healey maintains that Britain's economy shows "real signs of resilience: investments up, productivity is growing, and we had the joint fastest growth in the G7 in the first half of this year."
The Budget will announce a freeze in fuel duty and a nearly 4% rise in the minimum wage. Tariffs on a range of popular foods are set to be slashed, and the Carers’ Allowance cliff edge will end.
The Government commits to delinking gas and electricity prices. Prime Minister Andy Burnham has asked the Chancellor and Energy Secretary to examine scrapping standing charges from gas bills, while a higher tax-free mileage allowance of 55p is expected to become permanent.
Scotland's First Minister John Swinney called on Chancellor John Healey to provide substantial support for energy bills. Deputy First Minister Jenny Gilruth also urged investment in public services and action to stop soaring fuel costs, noting the Scottish Government faces a real terms cut in its finances in 2027-28.
The Prime Minister has already announced steps to help with living costs since taking power. These include cutting VAT on energy bills this winter, removing VAT from electricity bills, capping bus fares in England at £2 in 2027, extending the 5p fuel duty cut, and freezing rail fares and prescription charges.
Public finances are on a cliff edge.
Andrew Griffith, however, warned that public finances are on a "cliff edge." He urged Healey to make tough decisions rather than "kick the can down the road," specifically calling for action on the welfare bill and global threats.
Robert Jenrick echoed these concerns, stating, "Borrowing costs are soaring, national debt has surpassed £3 trillion, and the tax burden is at a record high." He called for a "break-glass Budget that finally puts the economy back on track."
The Chancellor stated that national security and defences will be strengthened, alongside support for Ukraine, in an uncertain world. Opposition critics have pressured the Chancellor to set out a clear path for defence spending to hit 3% of national income by 2030.
The Chancellor is expected to wait until next year’s spending review before announcing a roadmap for defence spending. Andrew Griffith stated that if Healey "fudges defence spending rather than properly funding 3% by 2030 in his Budget, he must resign."