Britain must prepare for a decade of pain as the country faces the worst decade for household income on record after John Healey’s "tinkering" Budget, the Institute for Fiscal Studies has warned.
The post Prepare for Decade of Pain, Warns IFS appeared first on The Daily Sceptic.
Ex-energy secretary Ed Miliband’s agenda appears undermined as money is diverted from renewables to defence
Britain is unlikely to hit its targets on green heating after the cuts announced by John Healey this week, experts have warned, as critics of Ed Miliband claim the former energy secretary’s green agenda is being dismantled.
The chancellor unveiled more than £3bn worth of cuts to the energy department’s budget this week, much of which will pay for higher defence spending.
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© Photograph: Justin Tallis/AFP/Getty Images
© Photograph: Justin Tallis/AFP/Getty Images
© Photograph: Justin Tallis/AFP/Getty Images
Prime minister says room for manoeuvre was limited by geopolitical crises and Labour’s 2024 manifesto
Andy Burnham has admitted his first budget as prime minister was not as radical as he would have liked because of the economic uncertainty facing the country.
He said he would have liked to have gone further with this week’s announcement – including with higher energy support payments – but felt hemmed in by external events such as the war in Iran, which has pushed up borrowing costs.
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© Photograph: Darren Staples/PA
© Photograph: Darren Staples/PA
© Photograph: Darren Staples/PA
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
Keira Callaghan says being prepared should be a public health measure, not a privilege, and Chris Rotheram is experiencing prescription anxiety. Plus five more letters in response to the Be Ready campaign
The Be Ready campaign may offer sensible advice in principle (Every Briton should stockpile water and food supplies, government advises, 22 October), but as a midwife working in Tower Hamlets, one of the poorest boroughs in London, I can see first-hand that its practical recommendations risk excluding precisely those families who are already most vulnerable.
For families living in a single room in a shared house, storing nine litres of water per person alongside three days’ worth of essential supplies may simply be unrealistic. When families are already struggling with the cost of food, heating and everyday necessities, buying additional emergency provisions may also be financially impossible.
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© Photograph: pundapanda/Getty Images
© Photograph: pundapanda/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
© Photograph: WPA/Getty Images
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
© Photograph: Darren Staples/AFP/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
© 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
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
© Photograph: Nathan Stirk/Getty Images
Net Zero costs have continued to climb in Labour's Budget, with tens of billions in subsidies being poured into renewables and other green boondoggles. We simply can't afford it, says Paul Homewood.
The post Net Zero Costs Continue to Climb in Labour’s Budget appeared first on The Daily Sceptic.
Healey’s attempt to provide ‘breathing space’ gives rich almost as much as poor, says Resolution Foundation
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
© 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.
Continue reading...
© Photograph: Darren Staples/AFP/Getty Images
© 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
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: Bloomberg/Getty Images
© Photograph: Bloomberg/Getty Images
© Photograph: Bloomberg/Getty Images
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
© Photograph: Washington Imaging/Alamy
Britain’s government has attempted to reconcile rising energy prices, constrained public finances and growing defence obligations in a Budget that illustrates how international conflicts are reshaping domestic economic policy.
Presenting his first Budget on 28 October, Chancellor of the Exchequer John Healey announced a £100 energy payment for millions of households, an extension of electricity VAT relief and additional measures intended to support businesses facing rising operating costs.
The package comes as Prime Minister Andy Burnham’s administration confronts the economic consequences of the conflict in the Middle East, alongside continuing financial commitments arising from Russia’s war against Ukraine.
The central difficulty is that Britain must simultaneously protect household purchasing power, support economic growth and finance a more expensive security environment, without allowing government borrowing to expand beyond its fiscal targets.
The most immediate measures concern energy.
Under the Treasury’s Budget proposals, up to 20 million households in England occupying properties in Council Tax bands A to D will receive a £100 payment from January 2027.
The government has allocated £2.6 billion for the programme, including corresponding funding arrangements for the devolved administrations.
The temporary reduction in VAT on domestic electricity will also remain in place until July 2027, a measure expected to reduce the annual Ofgem price cap by approximately £50 in April.
Meanwhile, the Chancellor announced plans to remove standing charges from domestic gas bills, transferring fixed costs into consumption-based charges.
Although the government estimates that the change could benefit a majority of households, its distributional effects will depend on individual consumption. Lower gas users may benefit differently from households with substantial heating requirements.
The measures demonstrate how energy prices have become a direct constraint on fiscal policymaking.
Britain’s exposure to internationally traded gas means that disruptions originating outside Europe can quickly influence domestic prices, regardless of the source of individual energy supplies.
Rather than introduce broad increases in personal taxation, the government has chosen targeted revenue measures.
The Bank Corporation Tax Surcharge will temporarily increase from 3 to 6 per cent between January 2027 and March 2028, helping finance household energy support.
The government has also announced changes to gambling taxation intended to fund assistance for smaller businesses in retail, hospitality and leisure.
Fuel duty will remain frozen until July 2027, extending a policy intended to limit motoring and transport costs.
These decisions reflect competing pressures.
Households and smaller businesses require relief from higher costs, while the Treasury must demonstrate that its spending commitments remain consistent with fiscal discipline.
The distribution of the tax burden is therefore becoming an important political question, particularly when the government is simultaneously seeking private investment to stimulate growth.
The latest forecasts from the Office for Budget Responsibility offer little prospect of rapid economic expansion.
According to figures published alongside the Budget, British GDP is expected to grow by 1.2 per cent in 2026 and just 1 per cent in 2027.
Inflation is forecast to peak at 3.8 per cent in the first quarter of 2027 before gradually returning towards the Bank of England’s 2 per cent target.
The Chancellor’s fiscal headroom — the margin available before the government’s borrowing rules would be breached — has narrowed to approximately £15 billion in 2029–30.
This creates an unusually difficult environment for policymaking.
Further economic disruption could reduce tax receipts or increase spending demands, leaving the Treasury with limited capacity to respond without revising its plans.
The Budget also places national security increasingly within the government’s wider industrial strategy.
Britain remains committed to reaching defence spending equivalent to 3.5 per cent of GDP by 2035, with an interim target of 3 per cent in 2030.
The government has announced plans for the National Wealth Fund and British Business Bank to deploy up to £5 billion over four years into defence, dual-use technologies and other sectors supporting national security.
It has also committed an additional £500 million to support Ukrainian air defences during the coming winter.
These measures extend beyond immediate military procurement.
They seek to strengthen domestic industrial capacity, encourage private investment and establish supply chains capable of sustaining higher defence expenditure.
However, the precise financing arrangements for Britain’s longer-term NATO commitments are to be determined at the next spending review.
Britain’s predicament closely resembles that confronting European Union governments.
Across Europe, policymakers are attempting to finance defence modernisation and energy security while maintaining social expenditure and industrial competitiveness.
The difference lies partly in the institutional frameworks within which those decisions are made.
EU governments operate under European fiscal rules, while Britain sets its own borrowing and debt targets. Nevertheless, all face the same underlying pressures from energy markets, interest rates and international security commitments.
For British businesses trading with the European Union, the effects of energy costs and industrial investment policies on either side of the Channel will remain particularly significant.
The October Budget consequently represents more than an exercise in temporary household assistance.
It exposes the difficulty of sustaining public services, improving competitiveness and responding to geopolitical instability when economic growth is modest and available fiscal resources are limited.
Whether the measures provide lasting relief will depend less on the immediate payments announced by the Chancellor than on the course of energy prices, inflation and economic growth over the coming year.
Few surprises as chancellor uses low-key speech blaming ‘global economic storms’ for stoking energy prices and cost of living crisis
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
© Photograph: House of Commons/AFP/Getty Images
Use our interactive tool to see how you have been affected by John Healey’s tax and spending announcements
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© Photograph: Peter Dazeley/Getty Images
© Photograph: Peter Dazeley/Getty Images
© Photograph: Peter Dazeley/Getty Images
Labour Chancellor John Healey has hit struggling workers, savers and landlords as he drives the tax burden to a new record high to fund energy bailouts and a mushrooming welfare bill in his Budget today.
The post Another Labour Benefits Street Budget appeared first on The Daily Sceptic.
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