Chancellor John Healey has delivered his first Budget. Among his announcements, he pledged help for some households with their energy bills, a rise in the minimum wage, cuts to business rates for high streets, as well as an online VAT crackdown and temporary tax hikes for banks. However, this was one set against a backdrop of lacklustre economic growth and a continued cost of living crisis.

So, who will actually be better off after this Budget? Chief Political Commentator and Former Downing Street Director of Comms give their verdict.

Kitty Donaldson, Chief Political Commentator

Chancellor John Healey went far further than expected on energy bills, with a £2.6 billion package to help households with the cost of rising gas and electricity this winter. Everyone who lives in a house with a council tax band between A-D will receive £100 paid directly into their bank account this winter to help with the cost of higher bills. This will help about 20 million households, well over half of all homes in the UK.

This steady-as-she-goes fiscal package was deliberately risk-free, emphasising “breathing room” for households with a lower-than-feared bank tax serving as a revenue raiser. The threshold for small business rate relief for retail hospitality and leisure businesses was raised from £12,000 to £18,000 and he extended the fuel duty cut until July 2027 and the VAT cut on electricity will be extended to July.

While he waits for global economic conditions to improve, Healey chose to let fiscal headroom – the government’s cushion against economic shocks – do much of the heavy lifting in this budget, announcing it would fall from £23bn to £15bn in 2029/30, before rising back closer to current levels at £22bn the next year. “That’s what a buffer is for. Use it when you need it. Rebuild it when you can,” he said. The market reaction was sanguine, which is what Healey wanted: make Britain a relative haven of calm against bond turmoil elsewhere.

Large parts of this Budget were inspired by his Yorkshire constituency, targeting shopkeepers struggling with overheads and self-employed tradesmen reliant on their vans. On the weekly shop, he said the government will suspend tariffs on more than 100 supermarket products in a bid to keep prices down. Other parts were driven by Prime Minister Andy Burnham’s personal priorities; Healey announced a further £430 million to keep rough sleepers off the street until 2029, while increasing the rates of tax on income from property and interest on savings by a further two percentage points from next April.

There is a grim backdrop to this budget: Healey may have hidden the numbers in his speech, but the Office for Budget Responsibility downgraded its forecast for economic growth next year from 1.6 per cent to one per cent, as the result of conflict in the Middle East, only rebounding back towards the end of decade, from 1.5 per cent to 1.8 per cent.

“This is a Labour budget for the worker, the sole trader, the parent at the school gate, the young person desperate to start their first job or start their first business,” Healey said. “These are my choices: raising revenue from those who can afford to pay. No tax rises on wages or dividends. Cutting taxes for millions of families and businesses. Just as the British people helped support our banks 20 years ago, it is our banks that will help give families breathing space today. And for our high streets, it is gaming machines and vape shops that will help provide the funding for our pubs, cafes and shops to thrive.”

He may be keeping us warm this winter, but this wafer-thin package will open Healey and Burnham up to internal Labour criticism for not being more radical and to shouts from the Conservatives and Reform UK for not doing more to fund defence before 2030 and cut welfare spending.

This was actually a relatively good Budget for first-time buyers.

The key announcement that will get the headlines is the Your First Home scheme – the government’s plan that allows people to purchase a new-build with just a 2.5 per cent deposit backed by a 20 per cent equity loan. But two other policies caught my eye too.

The first is the plan to ditch the Lifetime ISA (LISA) penalty. The LISA allows people to save tax-free for their first home and get a 25 per cent bonus from the government on what they save. LISA holders face a 25 per cent penalty if they are using the money for anything other than retirement, or to buy a first property worth under £450,000. That cap on property prices ended up penalising people.

As this applies to the entire withdrawal amount – your savings plus the government bonus – it results in you losing the entire bonus plus 6.25 per cent of your own original personal savings. But the government pledged to end this today – a big win for those who have the product and something campaigners have called for, for years.

The U-turn on the cash ISA changes will also help buyers. Many savers move their money from stocks and shares ISAs to a cash one before they buy a home to protect themselves from stock market crashes in the weeks before the exchange. They wouldn’t have been allowed to do this under new rules set to come in from April – but these changes have now been scrapped, which is another quick win.

Young people have been struggling to make ends meet, and Labour is finally beginning to take notice.

The minimum wage for 18 to 20-year-olds will rise from £10.85 to £11.27 an hour, while the National Living Wage will increase to £13.20. Both rises are around 3.9 per cent yet younger workers will still earn less an hour for doing the same job as someone aged 21. Why should our work be worth less simply because of our age? Labour promised in its 2024 manifesto to move towards equal minimum wages for adults. This is progress, but young people are still waiting for that pledge to mean something.

Labour is trying to ease the pressure, but the help only goes so far. Cutting tariffs on more than 100 everyday products is another step, but saving around 40p a week, as experts predict, will hardly make a dent for young people shopping on a strict budget.

Ending the Carer’s Allowance earnings cliff edge is another important step. Young carers who balance work with looking after a family member will no longer risk losing their entire allowance just because they earn £1 over the limit. This could make it easier for them to take on extra hours without worrying about losing key financial support. Yet, full-time students caring for family will still miss out under current eligibility rules, and the change is not due to take place until 2030–31. For young carers already balancing financial pressure with family responsibilities, that is a long wait.

These first steps must lead to bigger changes that make life more affordable for young people.

Guto Harri, Former Director of Communications at Downing Street and co-host of the Politics Unleashed podcast

There is a parallel universe where some will briefly welcome parts of this budget. They may qualify for the £100 fuel handout. They may get relief with their business rates, and those on the minimum wage will get a pay rise. But ministers won’t fund that rise, so every low paid worker just became £1000 a year more expensive to hire.

What the government is funding this year is a 3.9 per cent hike in the state pension and 6.2 per cent rise in the standard allowance of Universal Credit. The rest of us are on the hook for a massive bill that just got bigger.

Britain is £3 trillion in debt and the cost of borrowing is so high that government has to take out more loans to service it. Listening to the Chancellor handing out sweets was like watching a parent splashing out on Christmas when the family home risks being repossessed.

Public spending in the UK is on course to hit 48 per cent of GDP by 2045. Long before that the taxes that implies will have throttled economic growth or the borrowing costs will have forced John Healey to go cap in hand to the IMF like his namesake, Dennis Healey nearly half a century ago.

Nothing announced for this parliament will fix it. Dropping the triple lock is pencilled in for 2030 – beyond the next election. Likewise the three per cent increase promised for the armed forces. Just days ago, the new Defence Secretary told us we had a 1000 days to prepare for war with Putin. That’s a deadline we’ll hit long before the end of the decade.

A popular Prime Minister with a huge majority and half a Parliamentary term to go has tragically chosen to defer the big decisions. The “Mañana budget” critics feared shows our politics is paralysed.