LONDON, Oct 7 (Reuters) – British finance minister John Healey is expected to raise taxes in his first budget to restore some of his fiscal room for manoeuvre which has been eroded by the global surge in borrowing costs caused by the Iran war.
Healey and Prime Minister Andy Burnham have also promised that they will help to reduce the cost of living for voters.
But the strain on the public finances and big increases in tax announced by Healey’s predecessor Rachel Reeves are expected to limit the scope of the budget on October 28.
Following is a summary of some of the measures that Healey is reportedly considering.
MANSION TAX HIKE
Healey is considering extending a mansion tax to properties worth more than £1.5 million ($1.98 million) from a current threshold of £2 million, the Times reported on September 18, citing two government sources. The proposed change would more than double the number of homes subject to the levy to about 271,000 based on current property values, the report said.
BANK TAX
Senior executives from some of Britain’s biggest banks met Healey on Tuesday and media reported afterwards that they left with no clear sense of whether he planned to increase a windfall tax on the sector.
ENERGY SUPPORT FOR HOUSEHOLDS
Healey is considering an energy subsidy costing more than £1 billion to help mostly lower-income households, The Guardian reported on October 6, a smaller support programme than others offered by previous governments in recent years.
FUEL DUTY
An emergency cut in fuel duty introduced after Russia’s full-scale invasion of Ukraine is set to expire in January. However, no government has raised fuel duty since 2011 and Healey hinted last month that he might stop the increase, saying he was conscious of the pressure it would put on people.
DEVOLVING TAX REVENUES
Burnham has promised to give more powers to local authorities to spur economic growth in regions that have long underperformed London and the southeast of England. Bloomberg reported on October 2 that mayors could be given a 20% share in revenue growth from local business taxes.
($1 = 0.7567 pounds)
(Writing by William Schomberg; Editing by Andrew Heavens)
