Healey targets energy bills

Chancellor John Healey announced a £2.6 billion energy payment scheme to help millions of Brits cope with rising winter bills. Around 20 million households will receive £100 directly into their bank accounts.

War drives up costs

Healey blamed the Middle East war for pushing up energy prices on British families and businesses. He said the government rejected calls to enter the conflict directly.

“We did not want this war. We rejected calls from the leader of the opposition to jump two-footed into it.”

Bills set to rise sharply

Annual household energy bills are expected to rise by around £450 in January because of higher global gas prices, creating a grim backdrop for the government's cost-of-living efforts.

Banks face higher taxes

Healey raised the surcharge on bank profits by three percentage points to 6%, starting in January for 15 months. The increase was smaller than feared in the financial sector.

Fiscal headroom shrinks

The Office for Budget Responsibility predicts Healey's fiscal headroom will fall to £15 billion by 2029/30, down from a March projection of £24 billion.The buffer is expected to climb back to £22 billion in 2030/31.

“That is what a buffer is for. Use it when you need it, rebuild it when you can.”

Growth forecast revised down

GDP growth this year is forecast at 1.2%, revised up from 1.1%. But growth is now projected to fall to 1% in 2027, down from 1.6% predicted in March, before returning to 1.6% in 2028.

Opposition attacks budget

Conservative Leader Kemi Badenoch said the budget was not ambitious enough and accused Healey of delaying difficult decisions to keep an early election option open for Prime Minister Burnham.

“We are overspent, overborrowed, overtaxed, and drowning in an out-of-control welfare system. And this is his answer: it is simply not enough, not good enough, not strong enough, not bold enough.”