Chancellor aiming to 'ease the squeeze' with first Budget
John Healey will deliver his first Budget in the Commons later
Chancellor John Healey is expected to use his first Budget on Wednesday to ease the squeeze on households, with a fuel duty freeze, a minimum wage rise and a possible tax hike on banks all reportedly on the cards.
He will deliver the statement against a tough economic backdrop, which hasn't been helped by the war in Iran.
The Chancellor is expected to have limited scope for big giveaways.
The Iran war has pushed up the cost of government borrowing, which is likely to have shrunk his headroom significantly.
Headroom is the buffer between the Government's spending plans and its own fiscal rules.
Help with rising costs
Measures to ease the pressure on households and businesses are expected to feature heavily.
The Prime Minister has asked Mr Healey and Energy Secretary Miatta Fahnbulleh to look at scrapping standing charges on gas bills.
He also wants to end the link between wholesale gas prices and electricity bills.
That is despite gas making up only a small share of the electricity the country generates.
Mr Healey has reportedly given in to pressure to cancel January's planned fuel duty rise, as petrol and diesel prices soar.
That would freeze the rate at 52p per litre for the 16th year in a row.
According to reports, the Chancellor will also announce a minimum wage rise of nearly 4%.
He is also reportedly set to stop raising the rate for 18 to 20-year-olds by more than the rate for older workers.
Instead, it would go up roughly in line with the rate for people aged 21 and over.
A package of "everyday fixes" was announced on the eve of the Budget.
Unpaid carers who earn over the limit currently lose their Carer's Allowance entirely, and a taper system will replace that cliff edge.
The higher tax-free mileage allowance of 55p will become permanent.
Tariffs will be cut on a range of popular foods, including chocolate and gherkins.
More than 150,000 parents a year will also become eligible for parental pay.
Separately, the Treasury estimates that cutting paperwork for businesses could save firms around £800 million.
Banks and capital gains
The Chancellor has ruled out raising capital gains tax, which is charged on profits from selling assets.
Some Labour MPs had called for it to be brought closer to the rate paid on earnings.
Mr Healey is reportedly considering raising the surcharge on bank profits from 3% to 8%.
That would reverse a tax cut for the sector brought in by former chancellor Jeremy Hunt.
The Trades Union Congress backs the move and says it would raise £2.25 billion a year.
City representatives have claimed it would stifle investment in Britain.
Plugging the defence gap
Mr Healey has promised to find £4.7 billion to fill a hole in the defence investment plan (Dip).
The plan was one of Sir Keir Starmer's last major announcements as prime minister.
It promised an extra £15 billion for the UK defence sector but only set aside £10.3 billion.
The extra money will take defence spending to 2.7% of the economy by 2027.
The route to Nato's target of 3.5% of gross domestic product by 2035 will be set out at next year's spending review.
Any hints from Mr Healey about increases are likely to be closely watched.
He quit as Sir Keir's defence secretary in a row over funding.
At the time he argued for a plan to reach 3% by 2030, which the OBR estimates would cost an extra £17.3 billion in 2029-30.
Other spending
More than £600 million is expected to go towards projects on developing and safely using artificial intelligence (AI).
That includes £165 million for a national AI biosecurity initiative and an extra £120 million for the AI Security Institute.
A further £60 million is due fund a national cyber shield using AI to protect against hackers.
A £7 million fund will pay for a feasibility study into a possible bid to host a future Olympics and Paralympics in northern England.
An initial £285 million will support a plan to give mayors and regional leaders in England more money and power to invest in their areas.
More than £1 billion will be allocated for social and affordable housing.
A further £432 million will go to the rough sleeping programme in England.