Chancellor John Healey has insisted that yesterday's Budget will give Britons "breathing space" in a tough economic environment. Speaking to MPs, Healey said: "I know that people are under pressure. Too many people feel this country isn’t working well for them. And in particular, households and businesses face challenges from rising energy costs, due directly to the conflict in the Middle East. In the face of that, what matters is how we respond as a government and my choice in the Budget today is to give families and businesses some breathing space now."
Key measures announced
The Budget document claims it is providing this "by launching a new Household Energy Payment, freezing or cutting taxes for retail, hospitality and leisure (RHL) businesses on the high street, and protecting most individuals and businesses from tax rises – while kicking off longer-term changes to get costs down, starting with energy costs".
The Government is extending an energy VAT cut through the winter and spring to July, taking £50 off the annual price cap, and 20 million households in council tax bands A to D will receive a £100 energy payment.
Tax and wage changes
Fuel duty will be frozen for the sixteenth year in a row, and both the national minimum wage and the national living wage will rise by 3.9% in April. The threshold for small business rate relief for retail, hospitality and leisure businesses will increase from £12,000 to £18,000. Revenue will be raised by a tax hike on banks' profits.
Pensioners with incomes at or under the value of the full new State Pension will not be brought into paying tax because of State Pension uprating in this Parliament, the Budget added, and the benefit will increase according to the triple lock next year. However, this will be adjusted in 2030.
Healey's choices
Mr Healey said: "These are my choices: Raising revenue from those who can afford to pay, no tax rises on wages or dividends, cutting taxes for millions of families and businesses, and just as the British people helped support our banks 20 years ago, it is our banks that will help give families breathing space today. And for our high streets, it is gaming machines and vape shops that will help provide the funding for our pubs, our shops and our cafes to thrive. Breathing space now, while taking the long-term action to get costs down for good. The decisions I have taken today will help steer Britain through."
He added: "And when the storms pass, what matters is where Britain is heading. A Britain reindustrialised. A Britain with power returned to communities, threats deterred, global opportunities seized. In our first 100 days, this Labour government has set a course for fresh hope, good growth, and support for those who need it."
Readers are invited to vote in a poll on whether they feel they will have more breathing space as a result of Mr Healey's Budget.
