Chancellor John Healey will deliver the annual Budget on Wednesday afternoon, setting out how the government plans to fund Prime Minister Andy Burnham's policy ambitions, including ending rough sleeping and reforming the care sector.
Burnham has been in office for just over three months and has already proposed a range of costly measures, alongside a significant devolution programme that would hand control of economic levers to English regional mayors. Healey, appointed by Burnham, must now explain how those plans will be financed.
Key Budget measures expected
One of the biggest questions heading into the Budget was whether state pension recipients would begin paying income tax. Following last year's increase, the state pension was hovering just below the £12,570 personal allowance threshold, with the triple lock practically guaranteeing it would rise above it this year, making the benefit taxable for the first time.
According to the Sunday Times, Healey will prevent that by increasing the tax-free allowance for pensioners on low incomes to £13,036, expected to be the new state pension level. The newspaper reported that this threshold would continue to rise in line with state pension increases over the course of the Parliament.
Today, Burnham is highlighting £432 million in additional funding for his effort to offer rough sleepers a 'route off the street' by Christmas, which will be set out in the Budget.
Energy reform and defence spending
The Observer reports that Healey will kick off a series of 'deep reforms' to the UK's energy system aimed at bringing costs down and reducing household bills. That could include measures to 'decouple' gas from electricity prices, as the cost of the fossil fuel often sets the cost of power even if it is generated by renewables.
Speaking to the newspaper, Healey played down the potential for any earth-shattering moments, saying it was not the time for 'major moves on taxation or spending'. At Prime Minister's Questions last week, Burnham said he had instructed Healey and Energy Secretary Miatta Fahnbulleh to 'look at' removing standing charges from gas bills, and the result of that review may emerge at the Budget.
Healey, who resigned as Keir Starmer's defence secretary in a row over defence funding, is also set to announce billions in extra spending for the sector according to the Sunday Times.
What time is the Budget on Wednesday?
One area where there may not be a major commitment is on young people not in education, employment or training. The government is waiting for the recommendations of Alan Milburn's review into the issue, which is due shortly after the Budget.
Healey will deliver the Budget after the end of Prime Minister's Questions on Wednesday afternoon, typically between 12.30pm and 1pm. It will be shown live on BBC Two, ITV, Sky News and Parliamentlive.tv.
