Healey's Budget Leaves Energy Bills Higher Than Last Crisis, Thinktank Says

158. That is the average amount in pounds the poorest half of UK households will gain from Chancellor John Healey’s first budget across the next two years. According to the Resolution Foundation, that figure is only £14 higher than the £144 expected for the richest half. The thinktank published this analysis on Thursday, calling the budget a scattergun approach that does little to improve living standards.

The foundation’s chief executive, Ruth Curtice, stated that the support was a complete failure to target help at those who need it most. She noted that despite the measures, household energy bills will remain higher this year than they were during the previous energy price shock. The budget includes scrapping standing charges on gas bills and providing £100 in energy payments to up to 20 million households in council tax bands A to D.

Curtice criticized the reliance on 35-year-old property valuations to determine who qualifies for these discounts. She described the current parliament as being split into two distinct halves. The first half saw rising living standards and solid growth funded by large tax rises, though it also saw dramatic leadership changes in Downing Street. The second half, she warned, faces a painful trajectory with a projected £1,050 fall in typical disposable incomes by 2028-29.

This decline would limit income growth over the entire five-year parliamentary term to just £600. Curtice argued that cost of living support is being spread too thinly, leaving families facing higher energy costs than in past crises. She suggested that a more dramatic change of tactics may be needed as the government struggles to balance public service ambitions with household incomes.

Chancellor Healey acknowledged the tough backdrop of global economic turmoil, pointing to the Office for Budget Responsibility’s slashed forecast for next year’s GDP growth. He pledged to steer the country through the turbulence and rewire the economy for growth. The budget also features tax breaks for high street businesses and higher taxes on banks and gambling.

Defending the package, Deputy Prime Minister Andy Burnham told broadcasters that helping 20 million households with energy costs through the council tax cut was a bold move. He added that lifting 70,000 businesses out of business rates would provide a real lift to high streets across the country. The budget sets the stage for a period where the government must make starker choices between competing fiscal priorities.