Healey Reveals Smaller Fiscal Buffer in 2024 UK Budget After Global Economic Shocks
Key Highlights from Healey's 2024 UK Budget Speech
LONDON, Oct 28 (Reuters) - British finance minister John Healey on Wednesday set out the government's latest tax and spending measures in his first budget, seeking to boost economic growth while maintaining control of the public finances.
Healey's Opening Remarks
Below are quotes from Healey:
HEALEY'S FIRST WORDS
"This is a budget for the working people of Britain, for British businesses, big and small, delivered at a time when global uncertainties and pressures are swirling worldwide and hitting people here at home. A budget built on fiscal discipline, which matches immediate action today, with clear direction for the future."
Impact of Global Economic Shocks
GLOBAL ECONOMIC STORMS
"Analysts like to speak of economic headwinds. But what we face today are global economic storms with trade tensions acting as a drag on global growth, and (Russian President Vladimir) Putin's illegal invasion of Ukraine approaching the end of its fifth year."
"The OBR sets out that the war in the Middle East is a key driver affecting today's forecasts. And this government continues to work with our allies to end the conflict and restore shipping through the Strait of Hormuz."
"In the budget today, I have chosen to use some of the headroom established last year to absorb the impact of the Iran war to protect the economy, and to protect family budgets."
Fiscal Strategy and Borrowing
FISCAL HEADROOM AND BORROWING
"The OBR confirms today that headroom against the stability rule is £15 billion in 2029/30, before rising to £22 billion in 2030/31."
"That's what a buffer is for. Use it when you need it. Rebuild it when you can. And so, despite the global challenges, this budget puts us on track to eliminate the current budget deficit and get Britain’s finances into the black within 3 years."
"In today's forecast, borrowing falls to 4.2% this year, 3.4% next year, 2.9% in 2028/29, 2.1% in 2029/30, and 1.8% in 2030/31 and 2031/32."
DEBT
"Our debt as a percentage of GDP is 83.2% this year, 83.8% next year and in 2028/29, before falling to 83.1% in 2029/30, 82.3% in 2030/31 and 81.7% in 2031/32."
Economic Growth Prospects
ECONOMIC GROWTH
"Three months ago, the Bank of England upgraded their forecasts for growth this year. Two weeks ago, the IMF did the same."
"And today, the OBR has upgraded its forecast too – to 1.2% this year, followed by 1% next year, 1.6% in 2028, 1.8% in 2029, 1.7% in 2030 and 1.6% in 2031."
"Yes, there are real challenges ahead, but Britain has beaten the forecasts this year, and with the action I'm taking today, I believe Britain can beat them again."
Sector-Specific Measures
BANK SURCHARGE
"I am looking to our banks to help fund breathing space for British families. And so banks will pay an extra 3% on the Bank Surcharge. This will be time-limited, to pay for immediate support on energy bills, starting in January, ending 15 months later."
DEFENCE
"I want to thank my cabinet colleagues for everything they are doing, prioritising within their departmental budgets in the face of tough fiscal constraints.
"In today's budget, I am fully funding the Defence Investment Plan, including through capital reprioritisation across Whitehall."
"I am today launching the new Innovative Defence Finance Taskforce to lead this work forward ahead of the Spending Review."
"We will commence treaty negotiations on the Multilateral Defence Mechanism [with Finland, Poland, and the Netherlands] to boost defence investment and joint procurement across NATO allies."
"The National Wealth Fund and the British Business Bank will launch a new focus on defence, dual-use technology and sovereign capability, deploying up to £5 billion of investment and lending over the next four years."
NATIONAL MINIMUM WAGE
"For 2.3 million of our lowest paid workers, I am increasing both the National Minimum Wage and the National Living Wage by 3.9%."
TAXES
"I am raising taxes on gambling – by increasing Machine Games Duty from 20% to 25% for higher stakes machines, while protecting pubs and seaside arcades."
"I will carve out adult gaming centres and vape shops from business rate reliefs, and extend the business rates Transitional Relief Supplement for a further two years."
"For those who feel like celebrating tax cuts for our high streets - I'm providing a £10 million alcohol duty relief for around 2000 small British brewers and cider makers."
Support for Households
HOUSEHOLD BILLS
"We will introduce a new cost control framework to drive down all aspects of energy bills, and I will scrap the upcoming Gas Shipper Obligation – a levy to fund hydrogen projects – and instead back those projects directly from government."
"First, on clean power generation, this government will only buy and build new projects when they lower bills and when they can connect to the grid."
"Second, we will break the grip of international gas prices on our bills by moving more of our old renewables onto fixed-price contracts."
"And third, we will build cheaper, faster grid connections through GB Grid, and reform the complex web of institutions that govern them."
"This winter, for 20 million households in council tax bands A-D, I am announcing a £100 'Household Energy Payment'. Paid directly into people's bank accounts to help deal with rising energy bills, a £2.6 billion scheme, to take the pressure off in the coldest months and see people through to the Spring."
Housing Initiatives
HOUSING
"From today, I am dealing with the LISA penalty. If the home you want costs more than the limit, you will get back at least what you put in."
"From next Spring, a new scheme for first-time buyers who don't have the bank of mum and dad behind them. 'Your First Home' - an equity loan scheme, which I'm funding today with £4.7 billion of government-backed lending."
"I am providing an additional £1.5 billion for the Social and Affordable Housing Progr
