Experts round on chancellor over ‘scattergun’ budget, saying he ducked big tax and spending decisions

John Healey has backed away from cutting the cost of welfare this parliament, amid dire warnings his first budget could lead to brutal spending cuts because of a £28bn shortfall in public finances.

Experts rounded on Healey’s steady-as-she-goes budget on Thursday, with the Institute for Fiscal Studies saying he had left himself a mountain to climb by ducking big tax and spending decisions.

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© Photograph: Wiktor Szymanowicz/Future Publishing/Getty Images

© Photograph: Wiktor Szymanowicz/Future Publishing/Getty Images

© Photograph: Wiktor Szymanowicz/Future Publishing/Getty Images

John Healey aced the morning-after media round because his Martin Lewis measures left nothing to challenge him on

Maybe it had been one of the greatest acts of political genius after all. The day after the budget is usually the moment when things start to fall apart. When clued-up journalists and economists have had a chance to go through all the fine points the chancellor would rather everyone had missed. The forecasts that suggest everything is predicated on a wing and a prayer. The hidden unfunded tax cuts. The greater-than-expected spending commitments.

But on Thursday morning Andy Burnham and John Healey could afford themselves a sigh of relief. All had gone about as well as they could have hoped. It turns out that when you don’t make any massive tax or spending commitments, there isn’t a great deal to unravel. All there had been was a raft of small-scale interventions designed to help people with their personal finances. Call it the Martin Lewis budget. In fact, Healey and Lewis now seem unable to get through the day without spending some time with each other. They certainly can’t stop talking about one another. It’s becoming unhealthily co-dependent. The gods of small things.

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© Photograph: WPA/Getty Images

© Photograph: WPA/Getty Images

Thinktank says chancellor has given himself a mountain to climb after ducking big decisions in low-key speech

John Healey has paved the way for a “brutal” spending review next year after his budget failed to cover a £28bn shortfall in the public finances needed to avoid a return to austerity, according to Britain’s leading tax and spending experts.

A day after his address to the Commons, the Institute for Fiscal Studies (IFS) said the chancellor had left himself a mountain to climb by ducking several big decisions in his debut tax and spending statement.

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© Photograph: WPA/Getty Images

© Photograph: WPA/Getty Images

Treasury select committee asks FCA to investigate whether tax surcharge leak led to ‘improper release of inside information’

John Healey is facing pressure to clarify whether he permitted a market-sensitive budget leak ahead of his statement, which moved bank share prices.

The chair of the influential Commons Treasury select committe, Meg Hillier, has written to the Treasury and the Financial Conduct Authority watchdog (FCA) to assess whether a story leaked to Bloomberg, and published more than an hour before the budget was revealed, led to an “improper release of inside information”.

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© Photograph: House of Commons/Reuters

© Photograph: House of Commons/Reuters

© Photograph: House of Commons/Reuters

Chief financial officer says he hopes budget measure is temporary as sector provides loans that fuel growth

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A senior Lloyds Banking Group executive has criticised the chancellor for linking bank tax increases to energy bill support for UK households, as he warned the government against extending the higher levy beyond March 2028.

Lloyds’s chief financial officer, William Chalmers, acknowledged that the economic environment was “challenging” but said the government should not seek to ease pressure on households at the expense of the banking sector as it provides loans that could fuel UK growth.

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© Photograph: Nathan Stirk/Getty Images

© Photograph: Nathan Stirk/Getty Images

Healey’s attempt to provide ‘breathing space’ gives rich almost as much as poor, says Resolution Foundation

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• Budget 2026: what it means for your wallet, your mortgage and your pay

John Healey delivered a “scattergun” budget that did little to boost living standards and left Britain facing “a painful second half” of the parliament, a leading economic thinktank has warned.

The Resolution Foundation said on Thursday that measures to ease household gas and electricity costs would still leave energy bills higher this year than during the last energy shock.

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© Photograph: RichSTOCK/Alamy

© Photograph: RichSTOCK/Alamy

Prime minister wrote to ministers saying he did not want them to ‘advocate for specific options or opine on the likely outcome of the process’

Selling nicotine-free vapes to children under the age of 18 has become illegal from today, the government has said.

Children were already banned from buying vapes containing nicotine. But, under the Tobacco and Vapes Act, shops across the UK will now be banned from selling nicotine-free vapes, and nicotine pouches, to children.

Vaping can be a way to help established adult smokers who are already addicted to nicotine from tobacco to swap to a less dangerous product. Vaping is considered safer than smoking, but that is a low bar. Vapes should therefore never be used by children or non-smokers.

Some children have already come to harm from bad reactions to vapes. The long-term health harms of vaping in today’s children will only become clear over time. They are however unlikely to be good; inhaling multiple, often heated, chemicals into the lungs may well do irreversible harm.

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© Photograph: Darren Staples/AFP/Getty Images

© Photograph: Darren Staples/AFP/Getty Images

Chancellor’s comments come as fiscal watchdog says disability benefits will cost £100bn a year before end of decade

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John Healey had said there will be a reduction in the welfare bill before the next election, with a “tough” approach to young people who do not accept support to get a job or training.

The chancellor was repeatedly pressed on the issue in broadcast interviews after documents from the Office for Budget Responsibility suggested sickness and disability benefits would cost £100bn a year before the end of the decade.

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© Photograph: Guy Bell/Shutterstock

© Photograph: Guy Bell/Shutterstock

Exclusive: Backbenchers voice alarm over ‘intolerable position’ faced by Miatta Fahnbulleh over oilfield decision

Furious Labour MPs have been lobbying the prime minister and chancellor not to overrule the energy secretary should she decide to block the Rosebank oilfield.

MPs say they are alarmed at the cabinet splits that have emerged over the issue after sources told the Guardian that Miatta Fahnbulleh was minded to refuse environmental permission for the field.

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© Photograph: Kirsty O’Connor/Treasury

© Photograph: Kirsty O’Connor/Treasury

© Photograph: Kirsty O’Connor/Treasury

Chancellor’s ‘new course’ includes a £100 one-off payment, low-carbon upgrade loans and an end to standing charges

John Healey has unveiled a package of support for households being buffeted by “global economic storms”.

“I’m setting a new course to get energy costs down in line with Europe,” the chancellor said in his maiden budget. In the long term, he hopes that changes in how Britain covers the cost of renewables and grid upgrades will “drive down all aspects of energy bills”.

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© Photograph: Washington Imaging/Alamy

© Photograph: Washington Imaging/Alamy

Few surprises as chancellor uses low-key speech blaming ‘global economic storms’ for stoking energy prices and cost of living crisis

• Budget 2026: key points at a glance

• Briefing: key questions answered by Heather Stewart and Pippa Crerar

• Editorial: Budget’s bold ambitions and welcome first steps

John Healey raised taxes on banks and landlords to fund a £100 winter handout for 20 million families as official forecasts made clear there is no end in sight for the cost of living crisis.

In his first budget, the chancellor blamed “global economic storms” for the grim outlook, as the war in Iran drives up oil and gas prices.

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© Photograph: House of Commons/AFP/Getty Images

© Photograph: House of Commons/AFP/Getty Images

OBR cautions about Middle East war dragging down growth and triggering a fresh cost of living crisis

• Healey offers £100 payment to households to help navigate ‘global economic storms’

• Budget 2026: key points at a glance

• Budget 2026 live – latest updates

British households face a “pretty grim picture” for living standards as the war in the Middle East drags down growth and triggers a fresh cost of living crisis, the government’s independent forecaster has said.

In a report as John Healey announced his first budget, the Office for Budget Responsibility (OBR) issued a sharp downgrade for growth in 2027, household disposable incomes and the public finances despite the measures taken by the chancellor.

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© Photograph: Vuk Valcic/SOPA Images/Shutterstock

© Photograph: Vuk Valcic/SOPA Images/Shutterstock

Payments to 20m homes part of package to cut energy bills and ease cost of living crisis, paid for by bank windfall tax

• ‘A pretty grim picture’: outlook for UK living standards slashed despite Healey’s budget

• Budget 2026: key points at a glance

• Budget 2026 live – latest updates

John Healey promised to steer Britain through “global economic storms” as he announced an energy giveaway of £100 to 80% of households in England, funded by a smaller than expected windfall tax on banks.

In his first budget, the chancellor said 20 million households in council tax bands A to D would receive a £100 payment – a measure he said would cost £2.6bn.

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© Photograph: House of Commons/UK Parliament/PA

© Photograph: House of Commons/UK Parliament/PA

© Photograph: House of Commons/UK Parliament/PA

John Healey is announcing his financial update – here are the main points, with political analysis

• Budget 2026 live – latest updates

John Healey starts by saying that his budget is “delivered at a time when global uncertainties and pressures are swirling worldwide and hitting people here at home”.

Healey says he will meet the fiscal rule that day to day spending must be covered by tax receipts and the investment rule that government debt, defined as public sector net financial liabilities, must be falling as a percentage of GDP in the third year of the forecast.

The government will have £15bn of headroom in 2029-30 and £20bn in 2030-31, according to the Office for Budget Responsibility, the government’s forecaster.

Government borrowing will be 4.2% of GDP this year, 3.4% next year, then 2.9% and 2.1% 1.8% by 2030-31, the OBR says.

Predictions of slowing growth were wrong, Healey says. The OBR says GDP will grow by 1.2% this year, 1% next year, 1.6% in 2028, 1.8% in 2029, 1.7% in 2030, 1.6% in 2031. In March the OBR had predicted GDP growth of 1.1% in 2026, rising to 1.6% in 2027 and 2028, and dropping to 1.5% in 2029 and 2030.

Government debt is forecast to be 83.2% of GDP this year, 83.8% next year, and then falling to 83.1%, 82.3% and 81.7% in the following years.

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© Composite: PA;EPA;Getty

© Composite: PA;EPA;Getty

© Composite: PA;EPA;Getty

All the major tax and spending policies as John Healey announces them

Chancellor’s predecessor Rachel Reeves had planned to reduce allowance from £20,000 to £12,000 a year from April

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• What to expect from the budget: who wins, who pays?

John Healey is to use his first budget to ditch plans to slash the annual cash Isa allowance, the Guardian understands, preferring a carrot rather than a stick to encourage people to invest more in shares.

City experts welcomed news that the chancellor will overturn a decision by his predecessor, Rachel Reeves, to cut the allowance from £20,000 to £12,000 a year from April to get more money flowing into UK company stocks.

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© Photograph: Tetiana Chernykova/Alamy

© Photograph: Tetiana Chernykova/Alamy

© Photograph: Tetiana Chernykova/Alamy

The new government, led by Andy Burnham, will deliver its first budget on Wednesday, a plan expected to tread between wide ambition and narrow financial limits.

© Pool photo by Carlos Jasso

OBR says that living standards are forecast to rise by just 1% over the whole post-Covid decade

• Budget 2026: key points at a glance

Martin Lewis said that, when he met John Healey this morning, the chancellor said that, having removed standing charges from gas bills, he would also like to get rid of them from electricity bills. Lewis said:

The chancellor said he will be talking to Ofgem about how they get rid of the charge on electricity as well, but that is ‘trickier’ apparently and will take longer.

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© Photograph: House of Commons/UK Parliament/PA

© Photograph: House of Commons/UK Parliament/PA