Senior Conservatives and think tanks, responding to Chancellor John Healey’s Budget
Responding to John Healey’s Budget 2026, Simon Clarke, director of Onward said:
“This Budget was a missed opportunity that means the choices the country faces will be even harder in the future. Britain is drowning in three trillion pounds of debt, while the Chancellor shuffled costs from one pocket to the next.
“Businesses and households should not enter into an unlucky draw every time the Budget comes around. Scrapping standing charges on gas bills only to load the cost onto gas usage is not relief. Raising the minimum and living wage in a way that prices young people out of work is not relief. Cutting business rates for the high street while hiking them for small firms trading online is not relief.
“The Chancellor needs to tackle the causes of our problems instead of trying to manage the symptoms. Britain is over-borrowed and over-taxed, but instead Labour keeps doubling down on trying to spend their way out of trouble.”
Dr Valentin Boboc, Chief Economist, Institute of Economic Affairs, said:
“Today’s Budget takes one step forward and two steps back.
“Measures to cut energy costs, encourage investment and ease planning restrictions are welcome. But these are undermined by higher taxes, more spending and an increasingly complicated tax system.
“Higher taxes on banks risk discouraging investment, while another minimum wage increase will make hiring more expensive when youth unemployment is already above 15%.
“As the IEA’s Alternative Budget demonstrated, Britain needs simpler taxes, meaningful spending restraint and reforms that remove barriers to growth. Instead, the Chancellor has delivered more tinkering around the edges while leaving the fundamental problems facing the economy unresolved.”
Joe Shalam, Policy Director at the Centre for Social Justice, said:
“That was the fudge-it Budget. Faced with a welfare crisis, a million young people out of work or training and communities trapped in poverty, the government has, for now, handed out a few sweeteners and fudged the hard choices until the next review.
“Meanwhile, sickness benefit spending is now forecast to exceed £100 billion by the end of the decade and 6.7 million people are on out-of-work benefits, while the rest of the country is dragged into higher tax to pay for inaction. Public support for the system there to protect the most disadvantaged is being pushed to breaking point.
“A fudged holding position will not fix that. No doubt this will all be addressed in a manifesto that is surely in the post. But Britain cannot wait for an election. When the sugar rush wears off, all that will be left is wasted money and wasted potential.”
William Nixon, Senior Research Fellow at Policy Exchange and a former economist at Goldman Sachs, the Reserve Bank of Australia, and the Australian Treasury:
“The Chancellor’s ‘do no harm’ Budget fails to address the UK’s underlying economic and fiscal problems. Key and necessary reforms on energy, housing, tax and welfare spending have been kicked down the road.
“The incremental support for households is dwarfed in comparison to coming headwinds from higher energy prices and interest rates – which could lead to higher costs of up to £1000 per household per year. Removing VAT from bills (£50) and payments for lower-income households (£100) are relatively small in comparison. As highlighted by recent Policy Exchange research, the only way to sustainably lower energy prices in the UK is to significantly expand domestic energy production.
“The Budget has also done little to support the UK’s softening labour and housing markets – both heavily weighed down by tax and regulatory burdens imposed over the recent years. The new tax increase on banks will simply increase borrowing costs for consumers and businesses, reducing lending.”
Emmanuel Igwe, Economist at the Prosperity Institute said:
‘Today’s Budget was a coward’s charter.
‘John Healey’s first Budget fails the most important test: will it bring public spending and borrowing under control? The answer is an emphatic no.
‘The deficit is forecast to increase from 3.6 per cent to 4.2 per cent this year while debt interest is set to be £14 billion more than last year.
‘If the Chancellor was committed to creating breathing space for British people, he would be taking radical action to cut inflation and encourage job creation. He has chosen to tinker.
‘This Government has misunderstood what keeps energy bills high. The approval of Jackdaw is welcome, but the Government must press ahead with doing the same for Rosebank. Making the most of our resources in the North Sea is vital to getting costs down, not taxing banks.
‘We calculate that today’s increase in the minimum wage will cost businesses £2.6 billion. To create jobs for young people, businesses must be allowed to thrive. If we froze the National Living Wage for five years, we could create 600,000 jobs for those aged 16-24 and contribute £2.4 billion directly to the Exchequer.
‘If the Chancellor continues to dodge tough decisions, hard-working Britons will continue to feel the squeeze.’
Responding to the 2026 budget, John O’Connell, chief executive of the TaxPayers’ Alliance, said:
“The chancellor has driven the tax burden to another record high to pay for gimmicks and giveaways while sidestepping the ticking fiscal time bomb of runaway benefits spending.
“Deciding to target savings and productive investment means even more punishment for people doing the right thing, and a drag on much-needed growth, while the fiddly measures designed to cut everyday bills gloss over the fact that tax is the biggest cost of living.
“Politicians must shake their spending addiction, get a grip on welfare and give hard-working Brits real breathing space by cutting their taxes.”
Reacting to Chancellor John Healey’s Budget 2026 alcohol duty relief announcement, Viggo Terling, Chief of Staff at the Adam Smith Institute, said:
“£10 million of relief on a tax that raises £12 billion will be gratefully received by the small minority who qualify for it. Everyone else gets another inflation-linked rise.
Alcohol duty is already an unreliable source of revenue: last year the tax base shrank by 3.3% and receipts fell by 1.4%, in a year when rates went up.
The system currently taxes every drinker in the hope of curbing harm caused by a much smaller group. A moderate drinker’s first pint is taxed as heavily as a heavy drinker’s twelfth. Bolting on another bespoke relief does nothing to address this and only adds complexity to a regime in need of simplification.
The Chancellor should replace the present patchwork of alcohol duties with a single flat duty per unit of alcohol, whatever the drink or the size of the producer, and a relief for drinks served in pubs, where drinking is safer and already heavily taxed.”
John Flesher, Acting Executive Director for the Conservative Environment Network, said:
“This Budget is all mouth and no trousers on cutting the cost of energy. Extending the VAT cut on bills and giving out cash payments this winter are sticking plasters that fail to fix a broken system. The sky-high power prices faced by consumers and businesses demand more than warm words, tinkering, and taxpayer-funded handouts. Cheaper electricity is essential for tackling the cost of living, incentivising the uptake of clean technologies, and cutting emissions.
“The Government’s 2030 clean power target must go and the Budget concedes that it could drive bills up further. It’s high time that the Government officially dropped this expensive target and set out a proper plan to cut the cost of new energy infrastructure, modernise the grid, and permanently reduce electricity bills.
“The Budget is also once again hugely disappointing for everyone who loves our countryside, with core funding for farming and nature continuing to be eroded by inflation. The Chancellor has ignored the urgent need to better support farmers at a time when they are facing rising costs and dealing with the devastating impact of extreme weather caused by climate change. We cannot expect to restore British nature and boost our food security until that budget is uprated in line with inflation.”
CPS Director Liam Halligan said:
‘John Healey’s Budget statement is a dangerous continuation of Labour’s tax-and-spend fantasy, pushing Britain closer to a full-blown fiscal reckoning.
‘Despite the Chancellor’s rhetoric about ‘fiscal discipline’, by slapping extra levies on banking profits and property income, Healey is squeezing the very sectors needed to drive growth.
‘Britain’s national debt now tops £3 trillion, with a staggering £61 billion spent on debt interest payments alone over the last six months – equivalent to the entire annual defence budget.
‘Instead of addressing this structural crisis, Healey has kicked the can down the road, relying on ‘innovative financing’ and delaying core obligations, like the critical NATO defence spending targets.
‘And by eroding the fiscal ‘headroom’ buffer down to £15 billion amidst global energy shocks, this Budget risks a bond market meltdown.’
CPS Head of Small Business and Entrepreneurship Robert Colvile said:
‘This felt like a peacetime Budget in a wartime world.
‘John Healey is to be commended for ignoring many of the more lunatic ideas being proposed by his parliamentary colleagues, but a steady-as-she-goes approach leaves us acutely vulnerable to global events.
‘High borrowing has got higher, low growth projections have got lower, headroom has fallen and the numbers still rest on public spending projections that are increasingly fictional.’
CPS Head of Economic and Fiscal Policy Daniel Herring said:
‘Labour has, on paper, committed to fiscal prudence. But its spending plans are predicated on massive spending cuts just before the next general election, which are extremely unlikely to happen.
‘Furthermore, the government is using accounting tricks to hide additional capital spending.
‘By channelling investment into Public Financial Institutions (PuFins), Labour is increasing debt by £3.1 billion each year to spend on pet projects that will not deliver a high return, but are not captured by the fiscal rules. As we noted in our CPS paper released last week, taxpayers will ultimately pay the price if this money is poorly allocated.‘
This page will be updated as more responses are provided.