Healey targets Brits’ energy costs, raids banks in first budget
Britain's chancellor also slashes his fiscal buffer in first budget of the Andy Burnham era.
LONDON — Chancellor John Healey unveiled his first budget under Prime Minister Andy Burnham on Wednesday, enacting measures to combat soaring energy costs and assert the government's focus on the cost of living. Among these measures, Healey pledged a £100 energy payment to millions of British households during the winter months, citing rising costs due to the war in the Middle East. The scheme, which targets around 20 million families, will be funded by a £2.6 billion increase in taxes on banks.
Healey praised the "huge contribution" of Britain's banks while simultaneously increasing an existing surcharge on bank profits by three percentage points, raising it to 6%. This hike will be in place for 15 months starting in January. Additionally, Healey reduced the fiscal headroom — the gap between projected tax and spending plans and the limits set by the government's fiscal rules — to £15 billion by 2029/30, down from the March projection of £24 billion. He emphasized the need for this buffer but assured that it would be replenished as resources allow.
The overall economic outlook for the UK remains mixed, with GDP growth forecast at 1.2% for the current year, up from 1.1% in March. However, growth is projected to decline to 1% in 2027, from 1.6% in March, before returning to 1.6% in 2028.
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