Healey promises Budget will help UK chart a course through global economic storm

John Healey said his first Budget would “steer us through the economic storms”.

The Chancellor said his financial package was aimed at supporting the “working people of Britain” as well as “business big and small”.

Mr Healey said he was delivering his Budget “at a time when global uncertainties and pressures are swirling worldwide and hitting people here in Britain”.

The impact of the war in Iran has contributed to the difficulties facing the economy, pushing up inflation as a result of higher oil and gas prices.

The Chancellor unveiled a £2.6 billion energy bills support package for poorer households, hiking taxes on banks to help fund it.

The scheme will mean around 20 million households in council tax bands A-D will get £100 from the Government this winter to help with the bills.

Mr Healey also announced an increase in gambling taxes to pay for business rates relief for high street firms.

He said it would mean that 70,000 businesses would be taken out of paying rates altogether “meaning half of our shops, restaurants and gyms will now pay no business rates at all”.

Despite the economic difficulties the Office for Budget Responsibility (OBR) increased its forecast for economic growth in 2026, increased from 1.1% in March this year to 1.2%.

But the forecast for gross domestic product (GDP) growth was slashed from 1.6% to just 1.0% in 2027.

The forecast is then unchanged at 1.6% in 2028 before rising to 1.8% in 2029, then 1.7% in 2030 against forecasts of 1.5% in each of those years, then 1.6% in 2131.

Mr Healey said he was using some of the headroom Rachel Reeves had left against the Government’s self-imposed rules to provide help to ease cost-of-living pressures.

The budget watchdog predicts the Government will spend £14 billion more on debt interest this year, Chancellor John Healey said, as he vowed “fiscal discipline” in the face of economic “storms” the UK must weather.

Ahead of the Commons statement, Mr Healey announced standing charges on gas bills will be scrapped from next year as part of his effort to ease the cost-of-living squeeze.

He said he was using his Budget to cut energy bills “for good,” and signalled he will look into removing the fixed daily fees on electricity as well.

The gas standing charges are added to bills, regardless of how much gas a customer uses, and cost around £108 per year for a typical household.

Mr Healey will ask regulator Ofgem to remove gas standing charges for around 23 million homes “in 2027 or as soon as possible after”.

Instead, fixed costs will be paid on the unit rate, which the Treasury said could save 60% of households an average of £45 on their annual bills.

The fee does not pay for the energy itself, but covers the cost of delivering gas and electricity to homes and businesses – including the cost of essential maintenance and infrastructure upgrades.