Chancellor John Healey announced measures on energy bills, housing and parental leave in Labour’s Budget today, saying the plans were designed to give people “breathing space”.
The announcement in the House of Commons included plans to support first-time buyers, suspend tariffs on more than 100 everyday supermarket products and remove standing charges on household gas bills.
The Budget also includes a £100 energy payment for eligible households in England, an extension to the temporary VAT cut on electricity bills and additional funding for social and affordable housing.
However, the economic outlook has weakened. The Office for Budget Responsibility (OBR) forecasts that inflation will peak at 3.8% in the first quarter of 2027, while economic growth is expected to slow to 1% in 2027.
Healey said his Budget, which was made “for the working people of Britain”, would be fiscally responsible, but also give ordinary people breathing space, and echoed Prime Minister Andy Burnham’s earlier commitment to economic growth in every postcode.
“Yes there are real challenges ahead, but Britain has beaten the forecasts before, and I believe they can do it again.”
The Conservatives said the Government needed to reduce borrowing, cut welfare spending and lower taxes.
Party leader Kemi Badenoch said: “He needs to get borrowing down. He needs to get welfare down. He needs to get people’s taxes down.”
She said the UK is “drowning in an out-of-control welfare system.”
Rail boost
Labour Mayor of London Sadiq Khan welcomed the Budget, calling it “really positive”.
He said the Government would help bring cross-Channel rail services to Stratford International, which he said would create opportunities for jobs, investment and tourism.
Khan said: “After lobbying on the issue for many years, I’m delighted that the Government will help us to bring cross-channel rail services to Stratford International – making this station truly international for the first time.”
Social housing and homelessness
The Budget has allocated £1.5 billion for social and affordable housing in England, to help deliver around 10,000 homes.
Matt Downie, chief executive of the homelessness-prevention charity Crisis, said: “Increasing investment in rebuilding our social housing stock across England is hugely welcome.”
But he said “the missing piece” was that the Government should be doing more to prevent people being forced into homelessness in the first place.
“The government must bring housing benefit back in line with the real cost of renting,” Downie said.
Parental leave
Liberal Democrat MP for Twickenham, Munira Wilson, celebrated Healey’s decision to give self-employed fathers paid paternity leave. This comes after several thousands of fathers protested in a London march to push for better paternity leave conditions in May.
But she thought more should be done, stating: “Now the government must deliver paid leave for kinship careers and a review of payment rates, so every family can have genuine choice in those precious first weeks.”
She also criticised what she perceived as the Budget’s lack of investment in young people saying: “Wow, an entire budget speech and not a single word on schools, colleges student loans or early years.”
Food prices
The Budget has introduced targeted measures affecting grocery prices, household budgets and food retailers, including suspending import tariffs on more than 100 everyday supermarket items such as baked beans, gherkins, chocolate, marmalade and chocolate-coated wafers.
Charlotte Hill OBE, chief executive of London’s largest food redistribution charity, The Felix Project, called for tax changes to incentivise food redistribution in the Budget.
Hill supported the Government’s efforts but urged it to do more to make donating surplus food more rewarding than dumping it.
Children’s literacy
The Budget included up to £5 million a year for three years to support early-reading initiatives and organisations providing books to young children.
The government specifically highlighted the London-based Dolly Parton’s Imagination Library, as a recipient. Each month, the organisation sends a specially selected, wrapped and addressed book to children from birth to age five to encourage young readers.
The number of young people who enjoy reading in London has decreased by 20% since 2021, data from the National Literacy Trust (NLT) revealed two years ago, but the Dolly Parton Imagination library aims to tackle this.
The Director of Fundraising and Communications, Clare Cook, said: “We’re hugely encouraged by today’s announcement and the recognition that getting books into children’s homes is an important investment in their futures.
“With the cost of living continuing to put pressure on family budgets, access to books at home matters more than ever.”
“We’re delighted that the Government is backing Dolly’s dream: helping more children discover the joy of reading. We look forward to hearing more about the plans and exploring how this investment could help us reach more children and families across the UK.”
AI data centres
The Budget also set out a new deal to support the development of data centres in Britain, offering developers stronger grid connections on the condition that they invest in local communities and protect water supplies.
Healey said: “I want to make sure the British people can benefit from the huge potential upsides of AI.”
Featured image: Unsplash/Martine Mussies
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