Healey vows to give Britons ‘fresh hope for future’ in first Budget

John Healey has moved to reassure voters and nervous financial markets ahead of his first Budget as chancellor with an eve-of-statement video promising “hope for the future”.

At the chancellor prepares to unveil his Budget in the Commons on Wednesday, he is hoping to continue with prime minister Andy Burnham’s feelgood approach with retail offerings on the cost of living.

But the City is already concerned about a planned raid on bank profits to help Mr Healey fill a black hole in public spending and provide much-needed financial headroom in anticipation of more financial shocks in 2027.

There are threats that the current tax situation means that banks are considering moving headquarters out of London to European rivals, including Hamburg and Paris.

But Mr Healey aimed to assure them that he is providing financial stability and security while also telling voters who are still uncertain about Labour that he will provide help for them with rising costs.

In his eve-of-Budget video, Mr Healey said: “Breathing space for today and fresh hope for the future. That's what today's Budget will deliver.

“The world’s a highly uncertain place. Conflicts abroad are pushing up energy prices, and the cost of living here at home – piling pressure on the families, on businesses, and on our public finances.

“But Britain's economy is showing real signs of resilience: investments up, productivity is growing, and we had the joint fastest growth in the G7 in the first half of this year.”

It is understood that Mr Healey wants to find money to help the poorest households with energy bills as well as freeze fuel duty again.

He is under pressure to properly fund pay rises in the public sector with unions threatening strike action next year but he acknowledged that the international situation will make things difficult.

Referring to the continuing wars in the Middle East and Ukraine which are driving up inflation and hitting interest rates on people’s mortgages, the chancellor admitted: “We can't stop these shocks that hit Britain, but we can make Britain more resilient when they do.

“So, this Budget is designed to give households breathing space from some of the everyday costs, provide targeted support for businesses and self-employed people, and to start the long-term action needed to get energy costs down for good.”

However, he insisted that despite claims Labour has become “anti-business”, he does want to back them, even though he is set to add to cost pressures by agreeing to a 4 per cent rise in the minimum wage.

He said: “Breathing space today must go hand-in-hand with building for the future.

So, we'll back British businesses and entrepreneurs, we'll invest in the technologies that drive future growth, and we'll build more homes, shift power out of Whitehall, so that leaders locally can drive growth in every postcode.”

In an interview with ITV, Wes Streeting, the defence secretary, confirmed that his department will see extra funding in the Budget as Labour aims towards meeting the 3 per cent of GDP on defence and security by 2030, after repeated pressure to do so from Donald Trump.

Mr Healey resigned as Sir Keir Starmer’s defence secretary, triggering the events which saw Mr Burnham replace him as prime minister because of a failure by the previous government to find the military funding needed.

In his video, he insisted that he would come good on his promise to find the cash for defence.

Mr Healey said: “In an uncertain world, we will strengthen national security and our defences, as well as our support for Ukraine.”

But he insisted that the government will not take risks with the country’s finances.

“We'll do all of this responsibly, sticking within tight fiscal rules, and make sure every pound is well invested,” he insisted.

“Because this Budget is about getting through this difficult moment. But it's also about putting Britain on a future path, a better future path. Breathing space today, and fresh hope for the future.”