Chancellor Healey outlines modest fiscal plan for Burnham government's inaugural budget

Chancellor John Healey is set to present the Burnham government's first budget to the House of Commons at 12:30 pm, with Treasury officials emphasizing that the package will be modest and avoid major policy shifts. The budget is framed as a series of measures intended to give "breathing space for today, fresh hope for the future" to households facing rising living costs.

According to the Treasury, the plan does not include proposals to raise capital gains tax or adjust the mansion tax, and it pledges to remain within the fiscal rules established by the Labour Party. The government cites increased borrowing costs linked to the ongoing conflict in Iran as a constraint on spending capacity.

The budget is expected to contain "everyday fixes" aimed at easing cost‑of‑living pressures, including targeted support for poorer families with winter energy bills and reforms to the energy market intended to lower prices over the longer term. StepChange, a leading debt‑advice charity, reported that average household arrears among its clients rose from £2,833 in 2022 to £4,345 in 2025, with energy debt now affecting half of its users.

Policy editor Kiran Stacey of The Guardian noted that the budget will be smaller than the previous year’s and is unlikely to mark a departure from four decades of neoliberal policy. The government has also paused a proposal to equalise the lower national minimum wage for workers under 21 with the higher national living wage for older employees.

Other items highlighted in the budget include the abolition of a rule that previously forced unpaid carers into debt, a measure previously reported by the Guardian. The Treasury has described the overall approach as constrained by both external economic pressures and internal fiscal discipline.