Can John Healey make a dent in the cost of living crisis in his first budget?
Much of the Burnham project depends on how the budget is received, as promise of ‘breathing space’ is a two-way street You be the chancellor: play our budget game to see if you can
By The Guardian
John Healey faces pressure to deliver immediate help with the cost of living when he presents his first Budget as chancellor next week.
The Budget will be held on Wednesday, 28 October, under Prime Minister Andy Burnham’s Labour government. Burnham has made raising living standards and easing household costs central to his government’s programme.
Healey has promised to give consumers “breathing space”, but the chancellor must also work within tight financial limits. High borrowing costs, rising energy bills and wider international uncertainty are expected to make the task of balancing the books difficult.
The cost of energy is likely to be one of the main issues facing households this winter. Forecasts cited ahead of the Budget suggest the energy price cap could rise by £276, or 16 per cent, in January.
Possible measures include expanding the Warm Home Discount, which currently provides a £150 rebate for eligible households receiving qualifying means-tested benefits. Reports have suggested the discount could be increased by a further £100.
Burnham has also asked Healey to examine whether standing charges on domestic gas bills could be removed. The proposal could save households around £108 a year, although it had not been confirmed as Budget policy before the announcement.
The government is also considering whether to halt a planned fuel-duty increase. Burnham has said that “every possible measure” is being examined to reduce the cost of driving.
Any support for households would need to be funded. Speculation before the Budget included higher taxes on banks, landlords and gambling, alongside possible measures affecting businesses.
The scale of the challenge has led to warnings that help with bills could be outweighed by further rises in energy costs. Measures announced previously have reduced the average energy bill by a reported £195, but those savings risk being eroded by the expected January increase.
Healey is due to set out the government’s tax and spending plans in the Commons on 28 October.