John Healey Budget 2025: Breathing Space for Consumers 2026

John Healey has promised to use his first budget in a fortnight's time to offer consumers and businesses a "breathing space" while sticking to Labour's fiscal rules. Speaking to journalists in Bangkok, where he has been attending the International Monetary Fund annual meetings, the chancellor said he was conscious of rising costs. "I want the budget to be a budget that gives Britain a bit of breathing space – but also reinforces the strength of our fiscal plans and the strength of our resilience and our economy for the future," he said.

The government has already cut VAT on electricity bills, but Healey is expected to announce a further package of energy support at his 28 October tax and spending statement, before what is expected to be a sharp rise in the energy price cap in January. He said: "The prime minister's talked about recognising the cost of business, not just the cost of living." Healey also reiterated his insistence that he would be sticking to the spending plans set out by his predecessor Rachel Reeves at last year's spending review – and that cabinet colleagues would have to find any additional resources within their existing budgets.

What the Budget Means for Consumers and Businesses

With the cost of living crisis still biting, John Healey's commitment to providing breathing space for consumers and businesses is a welcome relief. The chancellor's focus on energy support comes at a critical time, as households and firms brace for another potential spike in energy bills in January. The cut in VAT on electricity bills has already provided some respite, but many are calling for more targeted measures.

For businesses, the promise to recognise the "cost of business" signals a potential shift in approach. Small and medium-sized enterprises have been struggling with rising operational costs, and any additional support could be a lifeline. However, with the chancellor insisting on sticking to existing spending plans, it remains to be seen how much fiscal room he has to manoeuvre.

Key Takeaways from John Healey's Budget Plans

• Breathing space for consumers and businesses is the central theme of the upcoming budget.
• Further energy support is expected on 28 October, ahead of a predicted energy price cap rise in January.
• The chancellor will adhere to Labour's fiscal rules and the spending plans set by Rachel Reeves.
• Cabinet colleagues must find additional resources within their existing budgets.
• VAT on electricity bills has already been cut, but more help may be on the way.

Comparing Energy Support Measures

To understand the potential impact of the upcoming budget, it's useful to compare the existing energy support measures with what might be announced. The table below outlines the current support and the expected changes.

While the exact details of the budget remain under wraps, the chancellor's rhetoric suggests a focus on easing the financial burden on both households and businesses. This could include direct payments, tax reliefs, or subsidies for energy bills.

FAQ

As the budget date approaches, all eyes will be on the chancellor to deliver on his promise of breathing space. For consumers and businesses alike, the measures announced could make a significant difference to their financial resilience in the coming months.