UK Chancellor Healey unveils energy bill support and fuel duty freeze in Burnham government’s first budget
Chancellor John Healey set out household support funded by higher taxes on banks, gambling, savers and landlords, alongside lower growth forecasts for 2027.
London, United Kingdom. Chancellor John Healey presented the first budget plan of Prime Minister Andy Burnham’s government to parliament on Wednesday, offering energy bill subsidies and a fuel duty freeze to help households cope with what he called “global economic storms”.
Household support
Healey said about 20 million households living in lower-valued homes would receive a £100 payment to offset rising energy bills, at a cost of £2.6 billion. He also confirmed that fuel duty rates would stay frozen. A temporary cut of five pence, introduced in 2022, will be extended until at least July.
How the package will be paid for
To fund the measures, the chancellor said he would increase taxes on banks and gambling, as well as income taxes paid by savers and landlords. He will also tighten value-added tax rules for online marketplaces such as Amazon and Temu.
Economic pressures
Healey said the economy faced pressure from the conflict in the Gulf, global trade tensions and the war in Ukraine. In his words: “Those are the storms we face. We can’t wish them away. We must choose the course we steer through them.”
Britain’s economy has so far withstood the energy price shock linked to the Iran war. However, rising inflation and the prospect of higher interest rates are likely to slow growth next year.
Growth forecasts
According to the Office for Budget Responsibility, gross domestic product is on course to expand by 1.2% in 2026, slightly above the 1.1% projected in March. For 2027, the watchdog now expects growth of 1.0%, a sharp reduction from the 1.6% it forecast in March, Healey said.
Output is projected to grow by 1.6% in 2028, 1.8% in 2029 and 1.7% in 2030. The previous forecasts were 1.6% for 2028 and 1.5% for both 2029 and 2030.
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