British Chancellor John Healey announced support to help households through the “global economic storms” with subsidies for energy bills and a freeze in fuel duty for drivers in the first budget plan of Prime Minister Andy Burnham’s government.

Healey told parliament on Wednesday he would raise taxes on banks, gambling and income for savers and landlords while also tightening value-added tax rules for online marketplaces – such as Amazon and Temu – to fund the package.

Healey said the economy faced a hit from the conflict in the Gulf as well as from global trade tensions and the war in Ukraine.

“Those are the storms we face. We can’t wish them away. We must choose the course we steer through them,” he said.

Around 20 million households living in lower-valued homes would receive a £100 payment to help offset their rising energy bills, costing £2.6 billion, he said.

Healey also said he would keep a freeze on the level of fuel duty rates, extending a five-pence temporary cut introduced in 2022 until at least July.

GROWTH DOWNGRADE FOR 2027

Britain’s economy has withstood the energy price shock from the Iran war so far. But rising inflation and the prospect of higher interest rates are likely to slow the economy next year.

Gross domestic product was on course to expand by 1.2% in 2026, up only slightly from a previous forecast of 1.1% announced by the Office for Budget Responsibility in March.

The OBR now expected GDP to grow by 1.0% in 2027, down sharply from its March forecast of 1.6%, Healey said.

Economic output was seen expanding by 1.6%, 1.8% and 1.7% in 2028, 2029 and 2030 respectively. Those projections compared with the budget watchdog’s previous growth forecasts of 1.6% in 2028 and 1.5% in 2029 and in 2030.

On entering Downing Street in July, Burnham promised “the biggest changes in the last 40 years”, including a bigger role for the state in the economy.

But Healey, a former trade union official, has to tread carefully to avoid piling more bond market pressure on Burnham’s new government .

Measures announced prior to his speech in parliament included the removal of standing charges on gas bills which would bring down costs for most households.

The Treasury has also announced tariff cuts on some imported goods including gherkins and marmalade.

More than £20 billion in extra support will go to state finance institutions to spur investment in artificial intelligence, defence and green energy by the early 2030s.

Healey has said he will reduce paperwork for businesses to save them £800 million a year.

The speech is expected to include details of how the government plans to give regional mayors more control over tax revenues, part of Burnham’s devolution push.

Healey’s spending options are limited by the surge in borrowing costs in Britain and around the world since the start of the Iran war which has eaten into his margin for meeting his main target for repairing the public finances.

He said the government’s buffer for meeting its main fiscal target by the end of the decade had fallen to £15 billion from a previous £24 billion, but the government will still meet its fiscal targets despite shocks from the Iran war.

“That’s what a buffer is for. Use it when you need it. Rebuild it when you can,” Healey said.

“So, despite the global challenges, this Budget puts us on track to eliminate the current budget deficit and get Britain’s finances into the black within 3 years.”

After big tax and spending increases in the two budgets of the previous finance minister Rachel Reeves, Wednesday has been framed as a “steady as she goes” moment for Britain’s economy.

Healey’s biggest hope is for an end to the Iran war, which would lower the government’s bill for servicing £3 trillion of public debt. That was already on course to gobble up more than 10% of public spending before the war began.

Healey said debt interest in the current financial year would cost more than £14 billion.

British comedian and actor Russell Brand said on Wednesday that friends and colleagues turned against him after allegations of sex crimes were made against him, before telling a jury in a London court that consent was fundamental.

Brand, once a regular figure on British television and star of a number of Hollywood movies, is on trial accused of three counts of rape, three of sexual assault and an attempted indecent assault involving six women between 1999 and 2009.

The 51-year-old former husband of US singer Katy Perry denies all the allegations.

Appearing in the witness box in the third week of his trial at London’s Southwark Crown Court, Brand said “no” loudly and clearly when his lawyer asked him if he had committed any of the alleged crimes.

The jury has previously been told how all the complainants came forward to detectives after a documentary was broadcast in 2023 along with a number of newspaper articles in which anonymous allegations were made by other women who are not involved in the trial.

Brand, wearing a black suit with an open-neck white shirt and a loose black tie, said the impact had been “devastating” as friends turned their backs on him and not a single person would give evidence on his behalf.

Asked by his lawyer Ian Winter if they would “touch you with a bargepole”, he replied: “No.”

‘CONSENT IS FUNDAMENTAL’, BRAND SAYS

As Brand described how his public image had grown over time, he said his marriage with Katy Perry in 2010 had brought him “staggering fame”. The couple split up 14 months later.

Prosecutors, who completed their case against him earlier on Wednesday, have described Brand as a sexual predator.

They said Brand raped a woman after meeting her at a fringe event at the Labour Party conference in 1999, forced a woman to give him oral sex in toilets at a London bar in 2004, and had molested another woman at a radio station in 2004 or 2005.

He is also accused of trying to pull a woman into the ​male toilets at MTV Europe, in London, where she was working in 2001, and that in 2009 he anally raped a woman who had agreed to consensual sex at his home.

The final allegation is that he assaulted a woman ⁠who was working at the Channel 4 TV station ​where they were involved in a recording project.

Describing the impact of the allegations against him, Brand said that he had been barred from the hospital where his son was receiving open heart surgery after the documentary was broadcast.

“My entire life has been consumed by these events, these allegations, these accusations, the impact of these allegations and accusations,” he said. “I have devoted myself to these matters.”

Brand said the first complainant had willingly had sex with him.

“Consent is fundamental, essential, necessary and indeed more important than sex itself,” he said.

The trial continues.

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

British finance minister John Healey is set to announce a cautious budget plan on Wednesday as he tries to avoid piling more bond market pressure on the new government of Prime Minister Andy Burnham.

Banks, gambling firms and online marketplaces such as Amazon AMZN.O and Temu PDD.O are expected to be hit with higher taxes. That would help to pay for support for poorer households facing high energy bills and to freeze fuel duty for drivers.

Healey – a former trade union official and a junior Treasury minister in the 1990s – says he wants to give Britain “a bit of breathing space” from the impact of the Iran war that is pushing up inflation.

“This budget is about getting through this difficult moment. But it’s also about putting Britain on a future path, a better future path,” he said in a statement.

DEVOLUTION, DEFENCE AND DEBT

His first budget – due to be announced in parliament just after 12:30 p.m. (1230 GMT) – will detail how the government plans to give regional mayors more control over tax revenues, part of Burnham’s devolution push.

Separately, more than £20 billion in extra support will go to state finance institutions to spur investment in artificial intelligence, defence and green energy by the early 2030s.

On entering Downing Street in July, Burnham promised “the biggest changes in the last 40 years”, including a bigger role for the state in the economy.

But Healey’s options are limited by the surge in borrowing costs for governments around the world including Britain, where investors remember the 2022 “mini-budget” of former Prime Minister Liz Truss and the ensuing bond market meltdown triggered by its unfunded tax cuts.

On Tuesday, Britain paid the highest interest on a 5-year government bond since 2008.

After big tax and spending increases in the two budgets of the previous finance minister Rachel Reeves, Wednesday is being framed as a “steady as she goes” moment for Britain’s economy, which has so far withstood the Iran war energy price shock.

Bond dealers polled by Reuters expect less than £10 billion in extra debt issuance this financial year, compared with April’s forecasts, though they see financing needs for next year being revised up by more than £25 billion.

In an attempt to ease some of Reeves’ big tax hit on employers, Healey has said he would reduce paperwork for businesses to save them £800 million a year.

Bigger policy changes – including how to fix the inflation hit to public spending – are likely to have to wait for a 10-year plan that Burnham has said he will announce later this year and a broad spending review in 2027.

But Healey is under pressure to say now how he intends to pay more for defence – an issue that caused him to quit as defence minister in June in a move that hastened Keir Starmer’s resignation as prime minister.

Possible savings from reforms to Britain’s fast-growing welfare spending could offer a bit of latitude later this year.

But Healey’s biggest hope is for an end to the Iran war, which would lower the government’s bill for servicing £3 trillion of public debt. That was already on course to gobble up more than 10% of public spending before the war began.

He has said he would stick to the government’s fiscal targets, key for maintaining the confidence of the bond market.

Britain’s budget forecasters are expected to say on Wednesday that the margin for meeting the more challenging target has fallen to £15 billion, from £24 billion in March.

The Treasury has announced a string of low-cost policies to try to show it can still help voters, including tariff cuts on some imported goods including gherkins and marmalade.

On Wednesday morning the government said it would remove standing charges on gas bills, fixed daily fees that are applied to bills regardless of usage levels. Instead the cost will be linked to the price of gas consumed, meaning those who use the least will pay less.

Sarah Coles, head of personal finance at investment platform AJ Bell, said targeted tax changes could help carers and parents. “For others they will be a drop in the ocean. Hard-pressed households will be hoping for more support,” Coles said.

British finance minister John Healey said he would help most households with their gas bills by enabling those who use the least to pay less as part of his first budget which is due to be announced in full later on Wednesday.

Healey – who has promised to give “breathing space” to families hit by the high cost of living – said he would abolish standing charges which are fixed daily fees that cover the costs of connecting a home to a gas supply and are charged on bills regardless of whether energy is being used.

“Gas standing charges are unfair and outdated so I am scrapping them to give millions of households a bit of breathing space,” Healey said in a statement issued by the Treasury.

He will ask regulators to remove the charges – which cost £108 ($143.78) a year for the typical household on average – in 2027 or as soon as possible after that, the Treasury said.

The costs will be shifted to the price of gas consumed which could save 60% of account-holding households around an average of £45 on their annual bill, the statement said.

Healey said his budget would “draw a line in the sand on an energy policy that has failed British billpayers for years, letting extra costs on bills pile high and leaving households even more exposed to global shocks”.

Earlier this month, the government cut value added tax on electricity bills which surged following Russia’s invasion of Ukraine and have risen again due to the Iran war.

Previous governments have imposed a price cap on energy prices and removed other levies.

Despite that, Britain’s regulated domestic price cap rose 4% in October, and some forecasts are predicting a rise of around 20% to over £2,000 pounds a year in January for an average domestic energy bill including electricity.

British households pay a standing charge on electricity bills which costs around £200 a year on the current price cap.