Healey Unveils Budget Amid Economic Headwinds
Chancellor introduces energy bill payments and tax breaks for high street firms as OBR forecasts income fall.
Carla Rooney
Chancellor John Healey presented a new Budget today, introducing a £100 payment for energy bills.
The UK economy grapples with severe challenges. These are intensified by the Iran war, energy shocks from Ukraine and Iran, and the lingering pandemic. The OBR forecasts real household disposable income per person will stand approximately 2% above pre-pandemic levels by 2030-31.
A £100 rebate was extended to 20 million homes in council tax bands A to D. Official forecasts indicate both inflation and government borrowing are set to rise.
An additional £5 billion annually in welfare spending received approval. A planned 6p-a-litre increase in fuel duty was delayed until July. The Chancellor maintained the freeze on tax thresholds.
The Budget established a target to spend three per cent of GDP on defence by the end of the decade; specific funding details remained undisclosed. Rachel Reeves's proposal to cut the tax-free cash Isa limit was scrapped.
The tax to GDP ratio is projected to surpass its historic high of 37.2 per cent next year. The small business rates relief threshold increased from £12,000 to £18,000. The national minimum wage will rise by 3.9 per cent.
Helen Miller observed, 'The plan to reduce borrowing has been pushed back.' Miller further stated, 'This Budget has a raft of fiddly measures but very little that will move the dial on growth.'
Critics claim the Budget is 'not bold enough.' However, Andy Burnham countered, 'It’s pretty bold to help 20 million households with energy costs through the council tax cut this winter.'
It’s pretty bold to help 20 million households with energy costs through the council tax cut this winter.
Burnham added, 'It’s bold to lift 70,000 businesses out of business rates altogether, and that will give a real lift to high streets up and down the country.'