UK Treasury chief faces headwinds as he delivers first budget under new Prime Minister, Andy Burnham
The budget targets household relief, higher bank taxes and new support for pensioners as the government tries to stay within tight fiscal rules.
- On Wednesday, October 28, 2026, Chancellor of the Exchequer John Healey delivered his inaugural Budget to Parliament, unveiling a cost-of-living package designed to provide "breathing space" for households and businesses amid difficult economic conditions.
- Mounting fiscal constraints and national debt exceeding £3 trillion have limited the government's ability to fund major giveaways, while global economic instability exacerbated by the Iran war has increased inflationary pressure and reduced fiscal headroom to £15 billion.
- Healey introduced a £100 energy payment for 20 million households in council tax bands A–D, extended the 5p fuel duty cut until July 2027, and announced plans to scrap gas standing charges starting next year.
- To finance these measures, the Treasury will raise the bank corporation tax surcharge from 3% to 6% for 15 months, while simultaneously increasing business rates relief thresholds to exempt 70,000 retail, hospitality, and leisure firms.
- Defense spending commitments remain central to the government's strategy, with plans to reach 3% of GDP by 2030; meanwhile, the Office for Budget Responsibility upgraded 2026 growth forecasts to 1.2% despite modest 1.0% projections for 2027.
204 Articles
204 Articles
POLITICAL COMMENT: Budget delivers breathing space today and fresh hope for the future for Portsmouth
Families will receive direct help with energy bills, motorists will see fuel duty frozen and thousands more high-street businesses will be taken out of business rates, as the Labour Government backs working people today while investing in Britain’s future.
Budget 2026: £100 energy payment, fuel freeze extension and tariff reduction for beans, chocolate and kerosene
John Healey has announced the Executive will receive funding for a £100 household energy payment for lower income households while a temporary VAT cut on electricity bills is to be extended until July 1, 2027.
Think Tanks Pan Healey’s ‘Do-Nothing’ Budget
The reactions are in from Westminster’s wonks on Healey’s Breathing Space Budget. They’re struggling to breathe… Onward’s director Simon Clarke said: “Britain is drowning in three trillion pounds of debt, while the Chancellor shuffled costs from one pocket to the next… Scrapping standing charges on gas bills only to load the cost onto gas usage…
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