John Healey Delivers Fiscally Neutral Maiden Budget
Chancellor John Healey delivered a fiscally neutral budget using fiscal headroom to offset the economic impact of the Iran war while adjusting ISA and tax rules.
Chancellor of the Exchequer John Healey delivered a fiscally neutral maiden Budget on October 29, 2026, focusing on modest adjustments and the deferral of major decisions. To mitigate the economic impact of the Iran war, Healey utilized fiscal headroom, which the Office for Budget Responsibility projected at £15bn by 2029/30.
Financial measures include restoring the £20,000 Cash ISA annual allowance, introducing a Starter ISA, and replacing the Lifetime ISA with a First Time Buyer ISA. The government also shielded state pensioners from income tax on earnings up to the full new state pension and introduced a 10% founders relief on capital gains tax for company asset sales beginning April 2027.
Healey also announced a shift in clean energy strategy. The government will now limit power contracts to projects that connect to the grid and lower consumer bills, while simultaneously cutting grants for carbon capture and hydrogen projects. These measures coincide with the first 100 days in office for Prime Minister Andy Burnham.
