John Healey has confirmed he will deliver his debut Budget on 28 October, pledging to “shift power and money out of Westminster” in a landmark fiscal statement.
The Chancellor announced the date on Friday, saying the Budget would “back Britain’s communities” and set the economic direction for the rest of the parliament.
“This will be a Budget that will be built on fiscal discipline,” he said. “It will meet our fiscal rules. It’ll give businesses and families some of the stability they need to plan for the future.”
Economists have predicted the Budget will mark the country’s third consecutive fiscal event in which the overall tax burden rises, heaping pressure on Healey before he has even stood at the despatch box.
City AM analysis found that the Chancellor already faces a fiscal hole of at least £22bn, prompting several economists to warn that tax rises are “pretty much guaranteed” come the autumn.
Speculation over the timing of the Budget had been growing since Healey and Prime Minister Andy Burnham announced a series of unfunded spending measures in their first few days in office.
Fresh policies unveiled in Burnham’s first two weeks include cutting business rates for pubs, stripping VAT from household energy bills, and a pledge to end homelessness across the UK.
Borrowing costs have also been pushed considerably higher than the Office for Budget Responsibility predicted in its March forecast, largely due to the ongoing war in Iran adding strain to the public finances.
Healey must additionally find funding for £4.7bn of the Defence Investment Plan announced during the final weeks of Keir Starmer’s government, compounding the fiscal challenge ahead of October.
In a letter to the Treasury Committee, Healey confirmed he had formally asked the OBR to prepare its biannual fiscal forecast for the 28 October date.
“Fiscal credibility is the bedrock of economic stability and national security,” he wrote. “That is why we will abide by the fiscal rules, ensuring we retain a buffer to protect us against uncertainty and the impact of instability in the Middle East.”
Healey has already promised his debut Budget will include a roadmap outlining how the Treasury plans to hand mayors greater autonomy over income tax, a central pillar of the government’s devolution agenda.
Burnham has been spearheading that devolution drive since becoming Prime Minister, promising to unlock “growth in every postcode” by granting the UK’s metro mayors more fiscal control and launching a Number 10 North operation.
By selecting 28 October, Healey will deliver the earliest Autumn Budget since 2021, a deliberate move analysts believe is designed to minimise prolonged speculation over the scale and nature of forthcoming tax rises.
Under predecessor Rachel Reeves, the UK economy ground to a standstill between spring and autumn in both years she served as Chancellor, with economists pinning the slowdown on businesses pausing investment ahead of her fiscal events.