Budget: Healey hikes taxes and delays defence spending as economy set to slump
John Healey has announced a string of tax hikes to fund short-term measures worth billions of pounds to help households and businesses cope with rising prices, in a maiden Budget that omitted major spending plans on defence and welfare. In his speech, the Chancellor said the government would look to raise defence spending to three [...]
Finance Minister John Healey unveiled a series of tax hikes during his maiden Budget to help households and businesses tackle rising prices, while omitting significant defense and welfare spending plans. He pledged to raise defense spending to 3% of GDP by 2030 as a "target date" and explored innovative financing methods, including public bodies and allied nations agreements.
The Budget targeted banks and online retailers, with an additional profit levy on banks for a limited 15-month period, increased gambling taxes, and a requirement for online marketplaces to pay VAT. The government's fiscal buffer against borrowing rules stood at £15bn, down from £23.6bn in March. The projected deficit for next year was expected to be 3.4% of GDP, prompting concerns from city analysts about the Budget's lack of defense investment and departmental cuts.
Healey announced a £2.6bn scheme to provide payments to 20 million homes and mentioned plans to transfer financial powers to local authorities as part of devolution reforms. The Chancellor confirmed funding for an existing defense investment plan, which covers a £5bn expenditure gap, and laid out steps to boost public sector productivity.
He also addressed tax rules for investors, including tighter rules on corporation tax expensing and increased rates on income from property and savings.
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