There was some detectable grumbling earlier this week over the lack of information about this budget compared with those of Rachel Reeves, and Healey has made much of the “military-style protocols” that have allegedly stopped the Treasury’s secrets from leaking out. But it seems more likely that there hasn’t been much to leak. “It’s going to be a far smaller budget than last year,” Kiran Stacey, the Guardian’s policy editor, told me on Monday. “It’s not going to be ending 40 years of neoliberalism.”
We’ve already covered some of its content: Patrick Butler and Pippa Crerar wrote yesterday on the government’s plan to abolish the detested rule that has plunged unpaid carers into debt (which the Guardian exposed last year). The government was criticised yesterday for pausing the process of equalising the lower national minimum wage, paid to people under 21, with the more generous “national living wage” for older workers, and has also announced a series of “everyday fixes” to ease the cost of living pressures facing UK households. That is expected to include support for poorer families with energy bills this winter and to pledge energy market reforms aimed at bringing down bills for all households in the longer term.
The extent of those pressures is remarkable. StepChange, the UK’s largest debt advice charity, pulled together some figures for this morning’s First Edition that show the average household arrears debt for their clients increased from £2,833 to £4,345 between 2022 and 2025. “In the late 2000s, people would primarily come to us with consumer credit debt,” a spokesperson from the charity told me. “But one in two people who come to us now have energy debt. These pressures are completely new.”
What could the government do to address energy bills?
A number of readers told First Edition that energy bills are their major concern. Michael works for a small property company, and rents a three-bedroom bungalow in Winchester where he lives with his three children. It’s draughty, and he spends about £165 a month on electricity and gas, which will increase this winter. “I think about the cost of everything now,” he tells me. “Will I get enough money to be able to afford this? Will I have enough when the rent is due?”
Healey has been considering making the warm homes discount, a £150 annual reduction to electricity bills for people in receipt of benefits, more generous. But Michael doesn’t qualify for this, since he doesn’t receive benefits. After tax, his monthly income is between £2,500 and £3,000, and his rent is £1,800 a month, leaving him at most £300 each week (in a good month) to cover the living costs of four people. The warm homes discount is targeted at the most needy and does nothing for people further up the income spectrum who are still struggling.
“Alongside funded measures to provide immediate relief, the government needs a structural plan to reduce energy bills over the medium term,” Mathew Lawrence, the director of Common Wealth, a thinktank that has been cited as an influence on Burnham’s government, tells me. One idea would be an “energy guarantee”, a protected bloc of energy priced at pre-crisis levels (as Kiran reported earlier this month, energy officials are working up more radical changes that could be introduced after the budget). But Healey has ruled out some of the tax changes that could help fund this type of policy. “So decisions on tax have limited the government’s scope for action on bills,” Mathew says.
What about food bills?
A persistent causes of stress for Michael is the rising cost of food. “Once something goes up in price, it never comes down again,” he says. This is well evidenced: one report from the Energy and Climate Intelligence Unit, published in May, observed that when food prices in the UK have risen during crises such as the pandemic, they have either fallen slowly or incompletely, or have stayed the same indefinitely.
One of the proposals the government announced on Monday is the removal of import tariffs on products including baked beans, chocolate and gherkins. But the impact on household budgets will be pretty minimal; the Treasury estimates it will save £21 on the average yearly food shop. For Michael, who tries to limit his weekly food shop in Aldi to £80, this will barely make a dent.
What will the government do about housing costs?
This was another concern that cropped up among First Edition readers. Sue, from west Kent, wants the chancellor to announce more council housing. Burnham has committed Labour to the biggest council housebuilding programme since the postwar decade, and Healey is expected to announce a further £1bn in funding for this. He’ll also likely provide more details of the Your First Home scheme designed to help first-time buyers get on the property ladder, a new version of the Help to Buy scheme, which pushed up house prices and made property developers inordinately rich.
The impact of both of these measures will only be felt in the longer term. A more immediate solution would be linking local housing allowance, which has been frozen since 2024, to rents. The Resolution Foundation finds that more than 900,000 private rented households on universal credit face a shortfall between their rent and their housing allowance, averaging £158 a month for a family renting a two-bedroom home.
Finally, what about fuel prices?
Pat, from Aberdeen, told us that she’d like to see the government reduce fuel prices. The rising cost of petrol is penalising people who rely on their cars to get around, and the government has announced that it will be continuing the freeze on fuel duty, the tax levied on every litre of petrol or diesel, which Rishi Sunak announced in 2022.
But maintaining the freeze on fuel duty will largely help higher-income households, who drive more, while depriving the government of a revenue source. “Obviously some people on low incomes have to drive a lot. But they’re also struggling with the cost of living at large,” says Jonny Marshall, an economist at the Resolution Foundation. “So instead of using this rather blunt instrument, it would be better to find other ways to help poorer households, particularly with more action on energy bills.”
A shop advertises a mid season sale in Wolverhampton, United Kingdom. Photograph: Christopher Furlong/Getty Images
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