UK budget: Healey accepts smaller fiscal buffer after global shocks hit economy

Below are quotes from Healey:

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HEALEY'S FIRST WORDS

"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."

GLOBAL ECONOMIC STORMS

"Analysts like to speak of economic headwinds. But what we face today are global economic storms with trade tensions ​acting as a drag on global growth, and (Russian President Vladimir) Putin's illegal invasion of Ukraine approaching the end of its fifth year."

"The OBR sets out that the war in the Middle East is a key driver affecting today's forecasts. And this government continues to work with ‌our allies to end the conflict and restore shipping through the Strait of Hormuz."

"In the budget today, I have chosen to use some of the headroom established last year to absorb the impact of the Iran war to protect the economy, and to protect family budgets."

FISCAL HEADROOM AND BORROWING

"The OBR confirms today that headroom against the stability rule is £15 billion in 2029/30, before rising to £22 billion in 2030/31."

"That's what a buffer is for. Use it when you need it. Rebuild it when you can. And so, despite the global challenges, this budget puts us on track to eliminate the current budget deficit and get Britain’s finances into the black within 3 years."

"In today's forecast, borrowing falls to 4.2% this year, 3.4% next year, 2.9% in 2028/29, 2.1% in 2029/30, and 1.8% in 2030/31 ​and 2031/32."

DEBT

"Our debt as a percentage of GDP is 83.2% this year, 83.8% next year and in 2028/29, before falling to 83.1% in 2029/30, 82.3% in 2030/31 and 81.7% in 2031/32."

ECONOMIC GROWTH

"Three months ago, the Bank of England upgraded their forecasts for growth this year. Two weeks ago, the IMF did ​the same."

"And today, the OBR has upgraded its forecast too – to 1.2% this year, followed by 1% next year, 1.6% in 2028, 1.8% in 2029, 1.7% in 2030 and 1.6% in 2031."

"Yes, there are real challenges ahead, but Britain has beaten ⁠the forecasts this year, and with the action I'm taking today, I believe Britain can beat them again."

BANK SURCHARGE

"I am looking to our banks to help fund breathing space for British families. And so banks will pay an extra 3% on the Bank Surcharge. This will be time-limited, to pay for immediate support on energy bills, starting ​in January, ending 15 months later."

DEFENCE

"I want to thank my cabinet colleagues for everything they are doing, prioritising within their departmental budgets in the face of tough fiscal constraints.

"In today's budget, I am fully funding the Defence Investment Plan, including through capital reprioritisation across Whitehall."

"I am today launching the new Innovative Defence Finance Taskforce to lead this ​work forward ahead of the Spending Review."

"We will commence treaty negotiations on the Multilateral Defence Mechanism [with Finland, Poland, and the Netherlands] to boost defence investment and joint procurement across NATO allies."

"The National Wealth Fund and the British Business Bank will launch a new focus on defence, dual-use technology and sovereign capability, deploying up to £5 billion of investment and lending over the next four years."

NATIONAL MINIMUM WAGE

"For 2.3 million of our lowest paid workers, I am increasing both the National Minimum Wage and the National Living Wage by 3.9%."

TAXES

"I am raising taxes on gambling – by increasing Machine Games Duty from 20% to 25% for higher stakes machines, while protecting pubs and seaside arcades."

"I will carve out adult gaming centres and vape shops from business rate reliefs, and extend the business rates ​Transitional Relief Supplement for a further two years."

"For those who feel like celebrating tax cuts for our high streets - I'm providing a £10 million alcohol duty relief for around 2000 small British brewers and cider makers."

HOUSEHOLD BILLS

"We will introduce a new cost control framework to drive down all aspects of energy bills, and I will scrap the upcoming ​Gas Shipper Obligation – a levy to fund hydrogen projects – and instead back those projects directly from government."

"First, on clean power generation, this government will only buy and build new projects when they lower bills and when they can connect to the grid."

"Second, we will break the grip of international gas prices on our bills by moving more of our old renewables ‌onto fixed-price contracts."

"And third, ⁠we will build cheaper, faster grid connections through GB Grid, and reform the complex web of institutions that govern them."

"This winter, for 20 million households in council tax bands A-D, I am announcing a £100 'Household Energy Payment'. Paid directly into people's bank accounts to help deal with rising energy bills, a £2.6 billion scheme, to take the pressure off in the coldest months and see people through to the Spring."

HOUSING

"From today, I am dealing with the LISA penalty. If the home you want costs more than the limit, you will get back at least what you put in."

"From next Spring, a new scheme for first-time buyers who don't have the bank of mum and dad behind them. 'Your First Home' - an equity loan scheme, which I'm funding today with £4.7 billion of government-backed lending."

"I am providing an additional £1.5 billion for the Social and Affordable Housing Programme, taking our total government backing for council housing to £40 billion."

REFORM TO TAX SYSTEM

"First, I am giving HMRC funding to improve compliance, and stronger powers to collect overdue tax from those who can clearly ​afford to pay, but ignore repeated contact. And I am reforming the administration ​of self-assessed income tax from 2029, bringing more of these taxpayers in ⁠line with the majority."

"Second, I am changing outdated rules so that people taking profits out of their companies are taxed consistently, and I will protect the treatment of genuine commercial transactions and families passing their businesses down to the next generation."

"Third, I am modernising the tax treatment of investment by foreign sovereigns."

"And fourth, I will resolve the question of VAT for larger taxi companies, ensuring they play by the same rules, no matter where they are located, while still protecting smaller local firms."

SAVINGS AND INVESTMENT

"I am ​taking a new approach today to encourage people on ordinary incomes to save and to invest, I will not go ahead with the cut to the tax-free amount that people can put into a cash ISA."

"The limit will stay at £20,000 ​per year, tax-free, for people of all ages ⁠and to make investment accessible, I will work with the sector to create a new 'Starter ISA' to reward first-time investors."

"I'm boosting investment through our Public Financial Institutions – a further £20.4 billion for the National Wealth Fund and the British Business Bank over the coming years, supporting 140,000 jobs."

DATA CENTRE COVENANT AND AI

"I am today launching a new British Data Centre Covenant with strict tests that data centres must meet: to invest in local communities, create local jobs and protect local water supplies."

"In return, critical data centres will get the grid connections they need, and, where necessary, be allowed to build onsite generation while they wait."

"I am announcing a new AI Challenge Prize to find innovative uses for AI in public services and the ⁠Union Learning Fund to ​back workers."

ENTREPRENEURS AND START-UPS

"I'm tripling the trading allowance - the amount you can earn from a new venture tax-free - from £1,000 to £3,000."

"I'm launching a new Young Entrepreneurs Allowance, which will cover a year of living costs ​for young founders while they turn their ideas into businesses."

"The British Business Bank will double its commitments to women-led businesses and funds to £200 million."

"I'm reforming skilled worker visas and non-compete clauses in contracts."

"Today I'm launching EMI2 - doubling the generosity of the Company Share Option Plan, so more companies can hire and retain top talent as they grow."

DEVOLUTION

"For the first time I'm making the commitment that 100% of business rates ​will be retained locally by the end of the decade."

"From next year, 20% of business rates revenue will go to mayors. From 2028, a share of income tax receipts will go to mayors as well. From 2028, mayors and other strategic authorities will have new powers to introduce an overnight visitor levy."