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.

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.

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.

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.

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

• Business live – latest updates

• 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.

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.

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

• Business live – latest updates

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.

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.

How the Burnham government’s first attempt to ease cost of living pressure pans out for key stakeholders
Budget 2026: key points at a glance

Every budget has its winners and losers, and John Healey’s first as chancellor was no exception. While some gained from tax breaks and rule tweaks, others will either pay more, or had their hopes of reforms dashed. Here are some of those with reason to cheer, or sigh:

Use our interactive tool to see how you have been affected by John Healey’s tax and spending announcements

• Healey keeps income tax thresholds frozen. How much more will you pay?

• Budget 2026: key points at a glance

• Budget 2026 live – latest updates

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.

Payment to 20m homes part of package to help cut energy bills and ease cost-of-living crisis, paid for by smaller than expected bank windfall tax

• 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 a package of measures to cut consumers’ energy bills, funded by a smaller-than-expected windfall tax on banks.

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

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.

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.

Struggling households, new homebuyers and small shops stand to gain, while banks and online marketplaces could face higher levies

• You be the chancellor: play our budget game to see if you can balance the books

John Healey will present his first budget on Wednesday, which will set the tone for Andy Burnham’s premiership.

Despite the chancellor’s promises in the summer that the tax and spending event would not be beset by the leaks that preceded those of his predecessor, Rachel Reeves, both official and unofficial sources have indicated much of what Healey is likely to announce. Here’s what to expect:

The prime minister previously said that he wanted a debate on how Britain can establish a closer relationship

Speaking at his rough sleeping summit in Downing Street this morning, Andy Burnham expanded on the claim he made on Good Morning Britain about tackling rough sleeping being cheaper than ignoring the problem. (See 11.13am.)

He said:

We’ve also got to be conscious when we speak to the rest of the country, the taxpayers of this country, that actually to leave people sleeping rough has financial consequences. It doesn’t work for anybody and it doesn’t work for the public purse, because if you leave people in a position where they are in and out of A&E, and in and out of a hospital bed, that doesn’t make sense for anybody.

There is a rock-solid business case to do something to end homelessness, to put people on a path to recovery, so that they can contribute once again. And that should be the thinking that we take to this conversation.

Burnham is throwing another £432m at a problem he failed to solve in Greater Manchester. Under Labour, rough sleeping has hit record highs – yet their answer is always more taxpayers’ money and more empty promises.

[John] Healey must use his budget this week to cut taxes for working people, get the ballooning benefits bill under control, and stop pushing up energy prices.

John Healey is expected to confirm on Wednesday that the full state pension will rise by £489 to £13,036 – equivalent to 3.9%.

However, the rise will push about one million people on low incomes who rely on the state pension above the £12,570 personal allowance threshold, meaning they would be dragged into paying income tax.

EU exit has damaged economy and failed to bring promised benefits, says PM, but he rules out big pre-election changes

Brexit has not “played out” like it was promised to the public, has weakened the economy and the current deal is not good enough, Andy Burnham has said, while ruling out any major changes in the current parliament.

The prime minister said Britain had ended up with a “harder Brexit than was proposed in the referendum campaign” and it had not helped to control the small boats crisis. Backing the home secretary’s tougher immigration rules, he said Brexit had weakened the UK’s ability to control its borders as it could no longer send people back to Europe.