Healey's cautious first Budget leaves him facing an '£11bn hole' as the OBR slashes growth to just 1%
John Healey's Budget scraps standing charges on gas bills and extends the VAT holiday on electricity to July, though the gas change will not take effect before 2027.John Healey's Budget hands HMRC sweeping new powers to deduct overdue tax directly from bank accounts without taxpayer agreement.
Chancellor John Healey's first Budget has been overshadowed by a damaging OBR verdict: welfare spending will exceed forecasts by £5bn a year, disposable household incomes in 2030 will be only 2% above pre-pandemic levels, and the fiscal watchdog says he must find an extra £11bn to avoid real-terms spending cuts before the decade ends. His flagship measure — a £100 energy payment for 20 million households across council tax bands A to D — brought down the government's own eligibility checker website within minutes of his Commons statement. Tory leader Kemi Badenoch accused him of letting Britain "collapse under the weight of welfare", while commentators read the cautious approach as a strong sign of a snap general election in 2027.
The OBR cut next year's growth forecast from 1.6% to just 1%, with unemployment projected to reach 5.1% in 2027 and inflation expected to average 3.4%.
Dan Hodges writes that Healey's careful incrementalism points more strongly than ever to Labour gaming out a snap election in 2027.
