Chancellor John Healey is set to deliver the Budget this afternoon, revealing how the government plans to fund Prime Minister Andy Burnham's costly proposals on rough sleeping, care sector transformation, and devolution.
The announcement, expected to begin at 12.30pm after Prime Minister's Questions, will be broadcast live on BBC Two, ITV, Sky News, and Parliamentlive.tv.
Pension tax threshold under review
One of the key questions ahead of the Budget was whether state pensioners would start 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 ever.
According to the Sunday Times, Healey is expected to prevent this by increasing the tax-free allowance for pensioners on low incomes to £13,036, which is expected to be the new state pension level. The newspaper reported that this threshold will continue to rise in line with increases to the state pension over the course of the Parliament.
Everyday fixes and energy reforms
Earlier this week, the Treasury announced five more 'everyday fixes' to make life easier without major fiscal changes. These include ending the cliff edge on the Carer's Allowance, extending parental pay to 150,000 more people, rolling out hundreds more Post Office drop boxes, making higher tax-free business mileage rates permanent, and scrapping import tariffs on food like chocolate, baked beans, and gherkins.
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. This 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 outlet, Healey played down the potential for any earth-shattering moments, saying it was not the time for 'major moves on taxation or spending'.
Defence spending and NEETs review
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. 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.
One area where a major commitment may not appear 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.
