Wednesday briefing: We asked you – what do you want from the Burnham government’s first budget?

Good morning. Don’t expect anything radical. This, the Treasury has been at pains to tell us, will be a very “low-key” budget. After weeks of speculation from journalists, a flurry of press releases from thinktanks, and a photoshoot with an obligatory red box, the chancellor, John Healey, will announce the details of the Burnham government’s first budget in the Commons today at 12:30pm.

Healey has been selling this as a series of measures designed to relieve pressure on low- and middle-income households under the mangled tagline of “breathing space for today, fresh hope for the future”. Many of the proposals have been briefed, and their modesty is a sign of the constraints – both real and self-imposed – that his government faces. He has rejected calls to raise capital gains tax or lower the mansion tax and has promised to stick to Labour’s fiscal rules, while the Iran war has increased the cost of borrowing and eroded his spending power. Voters might be hoping for something transformative from a government that risks presiding over the worst parliament for living standards on record.

That’s the impression I got from First Edition readers and people struggling with the cost of living, who I spoke to for this morning’s newsletter about what they’d like to see from today’s budget.

Five stories shaping the day before the numbers drop

Israeli elections are throwing the region into disarray. Exit polls and partial official results showed neither Benjamin Netanyahu’s coalition nor the opposition bloc led by former general Gadi Eisenkot had won enough seats to form a government. The result is likely to trigger weeks of political haggling. It’s a messy situation that complicates any diplomatic outreach. (Note: The strait of Hormuz peace deal talks are continuing in the background, but this week’s news is dominated by the internal Israeli chaos.)

Elsewhere, the government’s plan to fund a multibillion-pound nuclear plant at the Sizewell site in Suffolk has drawn fire. The government’s spending watchdog called it a “terrible deal” for the UK taxpayer over the rest of the century. In Brazil, the far-right senator Flávio Bolsonaro has reportedly fled the country. He is on his way to the United States after losing Sunday’s presidential election to the leftwing incumbent, Luiz Inácio Lula da Silva. (In a bizarre domestic note, a 78-year-old volunteer in the UK has claimed a Reform UK councillor accused her of “facilitating the invasion” and being akin to a Nazi collaborator because she has helped asylum seekers learn English.)

Why the Treasury is hiding its cards

There was some detectable grumbling earlier this week over the lack of information about this budget compared with those of Rachel Reeves. 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. It 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, and the silence from Whitehall feels less like discipline and more like admission of defeat.

The debt crisis nobody wants to talk about

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.” It’s a stark reminder that the cost of living isn’t just an abstract economic indicator; it’s a daily grind that breaks families.

And it’s not just about energy. The rise in arrears suggests that households are running out of buffer, forced to access credit they can’t repay. The charity’s data shows a clear correlation between the energy price spikes and the surge in debt advice requests. It’s a pattern that repeats across the country, from London to the North.

The government’s response so far has been piecemeal, targeting the very poorest while ignoring the squeezed middle. That’s a harder sell than it sounds, especially when the numbers don’t add up.

Voices from the ground: What readers want

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 like Michael, who are working but barely scraping by. How can a policy that excludes the working poor be considered a solution to the cost of living crisis?

Frequently Asked Questions

When is the budget being announced?

Chancellor John Healey will deliver the statement in the House of Commons today at 12:30pm. It’s a relatively late time for a budget, but this is his first, and the schedule was set weeks ago. Expect the highlights to hit the news wires within minutes of the start.

Will this budget cut taxes for most people?

Not significantly. The Treasury has ruled out major tax cuts, focusing instead on targeted relief for low and middle-income households through benefits and energy support. There’s no plan to change income tax rates or VAT in the immediate term. The fiscal room is tight, and the government is prioritizing protection over stimulation.

What about energy bills? Will they go down?

Immediate relief is coming for the poorest through expanded winter support. However, long-term structural reforms to the energy market are also being announced, which the government hopes will bring bills down over the next few years. It’s not a quick fix, but it’s a necessary one given the current market volatility.

Why is the budget being called “low-key”?

Because the major policy shifts are already known or have been quietly pre-announced. The Treasury is avoiding a grand reveal because the scope for major new spending is limited by the fiscal rules and the rising cost of borrowing. It’s a budget defined by what it doesn’t do as much as what it does.

What comes next?

The aftermath of this budget will shape the remaining 2 years of this parliament. If the “everyday fixes” fail to dampen inflation or reduce debt levels, pressure on the Burnham government will intensify. The next major test is the autumn spending review, where the real trade-offs will become visible. For now, hope is a commodity that’s in short supply, and the budget is just another attempt to ration it.

Source: Guardian World

This article was compiled by the IndiaBBCNews editorial system from verified international news sources. Facts have been independently reviewed. Original reporting: Guardian World.