Pre-Budget Brief 2026: Healey’s first Budget
Who wants what from John Healey’s first Budget, and which asks look likely to be met
John Healey delivers his first Budget as Chancellor on Wednesday 28 October, surrounded by competing demands from business, charities, councils, the NHS, defence and the Scottish and Welsh governments. The numbers do not allow everybody to win: government debt is around 94% of GDP and roughly £1 in every £13 of public spending now goes on debt interest.
Healey has promised to meet the fiscal rules with a buffer while giving families and businesses “a bit of breathing space”. With Labour’s manifesto ruling out higher rates of income tax, employee National Insurance and VAT, the money has to come from smaller taxes: banks, gambling, tougher VAT enforcement and possibly property.
The likely package pairs targeted energy support with rates relief and deregulation for business, and uses the National Wealth Fund and British Business Bank to increase investment. The biggest decisions on social care, defence and public ownership of utilities look set to wait for the Spending Review.
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Get the full reportWhat we found
1. Banks and gambling look more vulnerable than capital gains
Both the FT and Guardian report that Capital Gains Tax rates will not rise. The Times reports the Bank Corporation Tax Surcharge could be restored from 3% to 8%, raising around £2bn a year, and that higher betting-machine duties are being considered. Making online marketplaces collect VAT owed by overseas sellers could raise around £1bn.
2. Business looks set to get rates, regulation and investment rather than its full tax wishlist
The CBI, BCC and Make UK want action on employer NICs, and UK Hospitality wants VAT cut to 10%, but there is no convincing evidence either will happen. Healey has confirmed £20.4bn of additional capital for the National Wealth Fund and British Business Bank, and the FT reports a deregulation package for small businesses worth around £800m a year.
3. The hardest decisions are likely to be postponed
Andy Burnham’s National Care Service, the timetable for defence spending of 3% of GDP and public ownership of utilities all look likely to wait for the Spending Review. The IFS and Institute for Government warn that the underlying spending pressures do not disappear because decisions are delayed.
What’s in the report
- Healey’s first Budget p. 3
- Tax and the cost of living: where does Healey find the money? p. 4
- Business, growth, jobs and housing p. 6
- Welfare p. 8
- Health and social care p. 9
- Defence p. 10
- Energy, water, rail, infrastructure p. 12
- Education, skills and employment p. 13
- Scotland, Wales and devolution p. 14
- Pre-Budget summary p. 15
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