John Healey has put five "everyday fixes" on the table before Wednesday's Budget: a permanent rise in tax-free mileage, two weeks of parental pay for more self-employed fathers, an end to the Carer's Allowance cliff edge, tariff cuts on more than 100 household goods, and hundreds more Post Office drop boxes.
The Treasury says the package is about the weekly shop, the car used for work, and the unpaid carer who loses an entire benefit for earning a penny too much. Healey tied it to the wars in Iran and Ukraine. "We can't control global events, but we can act where we can make a difference," he said. Prime Minister Andy Burnham said the government was taking on "the big challenges" without losing sight of "everyday problems that cost people money or simply aren't fair".
Shadow chancellor Andrew Griffith was not buying the scale. "Shoppers face rising costs at the till and families are struggling to make ends meet, but Burnham's plan is cheaper gherkins," he said. "This is an insult to families hammered by Labour's tax rises." The Conservatives say earlier "everyday fixes", on airline charges, subscription traps, rogue traders and school uniforms, have already been wiped out by borrowing costs, tax and inflation.
The five changes, in plain figures
Mileage first. The 55p tax-free rate for the first 10,000 business miles in a private car will be locked in, and the rate above that will rise from 25p to 35p. The Treasury says that supports about three million employees and self-employed people who drive for work: nurses, care workers, builders and anyone else whose job is the road.
Parental pay is next. More than 150,000 additional parents a year, including self-employed fathers and partners who have missed out, will be able to claim two weeks of support, currently worth up to 194 pounds a week.
The carer's change is the one ministers will sell hardest. At the moment an unpaid carer who earns a penny over the weekly earnings limit, set at the equivalent of 16 hours on the National Living Wage, can lose the whole allowance. From the change, only 1 pound of support will taper away for every extra 1 pound earned. The cliff edge goes. The allowance does not become unconditional.
What Healey Has Already Announced
- 55p a mile for the first 10,000 business miles, and 35p after that, up from 25p.
- Two weeks of parental pay, up to 194 pounds a week, for more than 150,000 extra parents a year.
- Carer's Allowance tapers at 1 pound for every 1 pound earned over the limit, instead of stopping outright.
- Tariffs suspended on more than 100 goods, including marmalade, gherkins, kerosene and fertiliser. The Treasury's saving figure is up to 21 pounds a year on the food shop, with earlier suspensions included.
- Post Office drop boxes to rise to 1,000, with upgrades at 600 branches.
Marmalade, gherkins and the weekly shop
The tariff list is where the politics has stuck. Import taxes will be suspended on garlic, gherkins, chocolate-coated wafers, boiled sweets, toffees and caramels, citrus jams and marmalades, throat pastilles, plant-based drinks, kerosene and fertiliser. Marmalade currently carries a 20 per cent tariff plus 19 pounds per 100 kilograms. That charge is suspended, not abolished in statute for ever.
Put with suspensions already made in June, covering pasta, fruit juice and tuna among other lines, the government says households could save up to 21 pounds a year on the food shop. Farmers who buy fertiliser, and households that heat with kerosene, are in the same announcement. Twenty-one pounds will not move a family budget that is already absorbing inflation at 3.5 per cent. It is a number the opposition can hold up, and a number the Treasury can still defend as a cut rather than a slogan.
The fifth item is logistical. Hundreds more Post Office drop boxes will take the total to 1,000, so parcels can be sent and returned without a queue at the counter, in time for Christmas. Six hundred branches are also due to be upgraded by the end of the financial year.
What is still for Wednesday
None of this is the Budget. Healey speaks at lunchtime tomorrow. Low-income pensioners are already due a shield so the triple lock does not drag a full state pension into tax. The BBC understands fuel duty will be frozen again, with the 5p discount kept, and more than 1 billion pounds is lined up for social and affordable housing. The bank levy, still the tax rise the City fears, has not been confirmed in this morning's list.
Read the pension plan if you want the part of Wednesday that is already drafted, and the fuel and housing briefing if you want the money that still has to be squared with the gilt market. The gherkins are the row. The Budget is the bill.