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Key events
Healey says clean energy costs to be taken off energy bills
Healey is now talking about energy bills.
He says clean energy costs have just been added to bills in the past.
He will stop that, he says.
For many years, under Conservative governments, policy costs were simply loaded onto household bills through levies.
Today, I am putting an end to that.
We’ll introduce a new cost control framework to drive down all aspects of energy bills.
Healey says debt as a percentage of GDP will be 83.2% this year, rising to 83.8% next year and in 2028 and 202929, before falling to 83.1% in 2030, 82.3% in 2031 and 81.7% in 2032.
Healey says government borrowing falls to 4.2% this year
Healey turns to borrowing figures.
As a Labour government last year we cut borrowing to its lowest level in six years from 5.1 to 4.4% of GDP.
I continue that work today.
In today’s forecast, borrowing falls to 4.2% this year, 3.4% next year, 2.9% in 2029, 2.1% in 29/30 and 1.8 in 2030/31 and 31/32.
The drop in the UK’s fiscal headroom to £15bn in 2029-30 broadly matches City forecasts, although some economists had hoped the chancellor would manage a little more.
That’s down from £23.6bn back in March.
Morgan Stanley suggested earlier this week that the consensus was a little higher, saying:
No investor we spoke to contemplated a risk of the fiscal headroom coming in at below £15 billion, and most we spoke to said that even £15 billion (our base case) would be a disappointment, with consensus in recent days shifting towards between £15 billion and £20 billion.
Healey defends budget headroom falling to £15bn, saying buffer is there to ‘use it when you need it’
Healey says his headroom is being reduced.
The OBR confirms today that headroom against the stability rule is £15bn in 2029-30, before rising to £22bn in 2030-31.
That is what a buffer is for. Use it when you need it, rebuild it when you can.
Healey says he has kept the government’s fiscal rules.
Today, I meet the fiscal rules – the stability rule, that day to day spending must be covered by tax receipts, and the investment rule, that government debt, defined as public sector net financial liabilities, must be falling as a percentage of GDP.
This year, for the first time, I must meet these rules in the third year of the forecast, and I do.
Healey says borrowing costs have risen £14bn this year
Healey says economists talk of headwinds. But Britain is facing storms.
The war in Iran has caused turmoil, he says.
He says the government did not want the war, and ignored Kemi Badenoch’s invitation to jump in.
Inflation has gone up, oil prices have gone up, and gas prices have nearly tripled since February.
This has affected businesses, and governments. Borrowing costs are reaching levels not seen for decades, he says.
He says the OBR will say borrowing costs have risen £14bn this year.
Healey says it is an honour to be delivering the budget.
He jokes that he hoped to be the most watched minister this week – until the PM went on Gogglebox.
And he pays tribute to his predecessor Rachel Reeves. She was the first female chancellor and restored economic credibility, he says.
Ghani calls John Healey – mistakenly calling him “Sir John”.
Healey starts by saying this is a budget for the working people of Britain.
He says:
This is a budget for the working people of Britain.
For British businesses, big and small.
Delivered at a time when global uncertainties and pressures are swirling worldwide and hitting people here at home.
A budget built on fiscal discipline, which matches immediate action today with clear direction for the future.
PMQs is over. Lindsay Hoyle is now vacating his seat, because by tradition the deputy speaker takes the chair for the budget statement. Nusrat Ghani is now in charge of proceedings.
Josh Newbury (Lib Dem) asks if the government will take more action on press regulation.
Burnham says press intrusion can be unacceptable. He offers to hold a meeting with Newbury on this.
Burnham says using North Sea reserves can ‘accelerate’ move to a ‘clean energy future’
Danny Kruger (Reform UK) asks Burnham if he confirms the budget numbers assume that the Rosebank oilfield will be allowed. (See 10.25am.)
Burnham says the Rosebank decision is a quasi-judicial decision that will be taken by the energy secretary.
But he says Kruger is right to say the use of the UK’s North Sea reserves can “accelerate” the move to a clean energy future.
[Kruger is] right in pointing to the fact that use of our reserves can support and accelerate a clean energy future. And that very much was the logic behind the decision that the government announced on Jackdaw last week.
Dave Robertson (Lab) says Royal Mail has a problem because it cannot compete with competitor companies that don’t give their workers equivalent rights.
Burnham says he will look at this issue.
Burnham ducks invitation to condemn Steve Witkoff for calling Putin a humanitarian
Johanna Baxter (Lab) asks if Burnham agrees that Steve Witkoff, Donald Trump’s envoy, was wrong to call President Putin a humanitarian.
She says:
The people of my constituency looked on in horror that our closest ally could use such words for a man wanted by the international criminal court for the systematic abduction of 20,651 Ukrainian children …
So will the prime minister remind our American partners that appeasement, flattery and sanction dodging deals will only embolden Putin and risk further aggression to our Nato allies?
Burnham says Baxter is “absolutely right” in what she says about Putin. But he does not comment on Witkoff calling him a humanitarian.
Davey asks Burnham if he will back the UK joining the EU single market and customs union.
Burnham says he wants to get a better relationship. And he says it is “extraordinary” that the Tories do not support trying to improve the Brexit deal.
Ed Davey, the Lib Dem leader, says he welcomes the news that the carer’s allowance cliff-edge will be abolished. But he says he is not happy about the details. He says:
It won’t take effect for four years and, when it does, the government will claw back £1 for every £1 a carer earns – a 100% tax rate for working carers. That can’t be right.
Burnham says he wants to establish a cross-party consensus on care.
Burnham says he is “increasingly confident” that he will be able to meet his target of ensuring that all rough sleepers get the offer of a bed for the night before the end of the year.
Badenoch asks Burnham to rule out any referendum on the EU or the single market.
Burnham says he is “doing what I can do to get a better deal for Britain”. That is part of his job, he says. He says the CBI and other business organisations and big businesses support his drive to get a better deal.
Badenoch claims Brexit has been good for London. Does Burnham really think the country wants to reopen the Brexit debate.
She says Burnham was not in parliament at the time.
The country was paralysed. It was miserable, regardless of which side of the debate you were on.
Yes, says Burnham. He claims Badenoch has conceded that Brexit has been bad for growth. He says he wants a better deal.
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