Healey outlines modest budget amid cost-of-living pressures and devolution plans
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Chancellor John Healey said the upcoming budget will focus on reducing energy costs, avoid new taxes and pursue extensive devolution, while acknowledging fiscal constraints and global pressures.
Chancellor John Healey told the BBC that the next budget will aim to "start the long-term action needed to get energy costs down for good" and will not raise income tax, national insurance or VAT. He described the fiscal situation as constrained by a high national debt, rising energy bills and inflation, adding that some pressures stem from the war in the Middle East.
Healey also announced plans for a "really radical devolution of powers and resources to local leaders" to shift decision-making away from Westminster. The government intends to increase defence spending to 3% of national income by 2030, with details to be set out in next year’s spending review.
Institute for Fiscal Studies director Helen Miller said the new government faces a "long list of constraints" that are partly self-imposed and partly driven by global events. The Resolution Foundation warned that the conflict in the Middle East could push up energy prices and interest rates, potentially delivering another shock to household and public finances.
Opposition figures criticised the budget proposals. Conservative shadow chancellor Andrew Griffith said public finances are "on a cliff edge" and urged tougher decisions, while Liberal Democrat MP Daisy Cooper called a "steady as she goes" budget insufficient. Reform UK’s Robert Jenrick warned the chancellor cannot keep "fiddling while the economy burns".
The budget is expected to be smaller than recent years in terms of tax and spending changes, reflecting the government's pledge to provide "breathing space" and hope within the limits of its fiscal constraints.