Healey shirks defence in wait-and-see Budget

Afternoon all,

There we have it. John Healey has delivered his maiden Budget, promising to give voters “breathing space” from the more uncomfortable elements of the Iran war with a flurry of short-term handouts.

There was a £20bn promise to take £100 off lower council tax band households’ energy bills and an extension of the VAT exemption announced earlier this year. There was a promise to slash business rates on high-street shops by lifting the threshold at which it kicks in. And there was an extension of the 5p discount to fuel duty.

But just as he gave, he also took, targeting industry-specific levies that felt altogether very… Labour. Banks were, as expected, hit with a windfall tax and gambling firms were squeezed. There were also no firm commitments on defence to speak of.

PLUS: UK lenders have been fairly mealy-mouthed in their response to the heavily-trailed windfall tax. Not JP Morgan. Jamie Dimon’s banking juggernaut burst out of the traps after Healey sat down, accusing the government of “lacking principle”.

We’ll be back in your inboxes at 8am tomorrow. In the meantime, have a great evening.

Ali

John Healey has announced a string of tax hikes to fund short-term measures worth billions of pounds to help households and businesses cope with rising prices, in a maiden Budget that omitted major spending plans on defence and welfare.

In his speech, the Chancellor said the government would look to raise defence spending to three per cent of GDP to three per cent by 2030 as a “target date”. He said the government would “look hard” at departmental budgets and “use more innovative financing”, including through public bodies and agreements with allied nations.

Healey used his Budget to help address the cost pressures faced by people and firms around the country, as he slapped extra levies on banking profits and online retailers.

John Healey’s move to reverse the cash Isa ceiling in has sparked a row across the City, as banks and brokers butt heads over the end of the controversial measure introduced by his predecessor.

The Chancellor ended plans to lower the annual cash Isa limit from £20,000 to £12,000 in his maiden Budget.

JP Morgan has slammed the Labour government for raising taxes on the UK banking sector and said the move "lacks principle".

Wall Street's biggest bank, which serves over 2.5m UK users through its retail arm Chase, has said it is "committed" to the UK but raised concern over the targeting of the sector in John Healey's first Budget.

The Chancellor has allocated an extra £20.4bn to the country’s two major state-owned policy banks for the next five-years. The National Wealth Fund will get around £15.4bn, while the British Business Bank will receive £5bn.

“I will work with pension providers, asset managers and the wider industry to accelerate more private investment into Britain’s innovative, fast-growth firms,” the Chancellor said.

The Conservative leader admonished the Chancellor for failing to cut levels of government spending and said the government was to blame for a fall in growth projections next year from the Office for Budget Responsibility (OBR).

“I would have thanked the chancellor for advance sight of his statement but it was so redacted it was like reading it in the dark,” she said. “This government has put welfare first. We are overspent, over-borrowed, overtaxed and drowning in an out-of-control welfare system and this is his answer?”

Culture writer Adam Bloodworth tried to watch the Budget 2026 in full. Here’s how that went in full, excruciating detail.

The Chancellor’s decision to reinstall an incentive to keep money sitting in cash is a failure of ambition to stimulate growth, argues IG Consumer chief executive, Michael Healy.

John Healey confirmed in his fiscal statement that a £7m fund would be made available to conduct a “feasibility study for a potential future bid to host the Olympics and Paralympics in the North of England during the 2040s”.

It will report back in three years time, ahead of a potential bid for the quadrennial multi-sport competition.

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