UK Chancellor Healey sets October 28 for first Budget
Chancellor John Healey has scheduled his first fiscal statement for late October, a date that will test the government's ability to fund new spending pledges without raising core taxes.
Chancellor John Healey will deliver his first Budget on October 28. The date sets a tight timeline for a government juggling rising cost-of-living pressures and a narrowing fiscal buffer.
In a video message, Healey sought to reassure markets about his approach. "This will be a Budget that moves money and power out of Westminster, and into every postcode around Britain," he said.
He pledged the statement would be built on fiscal discipline and meet the government's fiscal rules. "It'll give businesses and families some of the stability they need to plan for the future. Now, let's get on with the job," he added.
That promise of discipline will be tested against a flurry of recent spending commitments. Prime Minister Andy Burnham has pledged to maintain strict fiscal rules and honour the 2024 manifesto promise not to raise income tax, VAT, or national insurance contributions.
Economists warn the government has minimal room for error. New cost-of-living measures, including scrapping VAT from domestic electricity bills, will reduce revenue.
Planned increases in defence spending and social care will further strain the public finances. These competing pressures will force difficult trade-offs.
Fiscal buffer at risk
Healey takes over the Treasury with a significantly smaller safety net than his predecessor. Rachel Reeves left a £22bn buffer against fiscal rules, but persistent inflation driven by the war in the Middle East may have already eroded this margin.
The impact of the Iran conflict on energy prices and the broader economy limits Healey's options. Businesses and investors will be looking closely at how he plans to fund Burnham’s policy priorities without breaking tax pledges.
Devolution plans
The October statement will also detail a major structural shift in UK taxation. Burnham announced that English city region mayors will receive a share of income tax revenue for the first time.
This move is part of a broader effort to decentralise power from London. The exact portion of tax revenues allocated to the mayors will be outlined in the Budget.
For investors, this introduces a new layer of regional fiscal dynamics. It could directly affect local infrastructure spending and regional economic growth.
