Chancellor John Healey is expected to pay for new initiatives in this month's Budget, including a cost-of-living package, with higher taxes or spending cuts rather than more borrowing, the Financial Times has reported, according to Reuters. Healey delivers his first annual Budget on Wednesday 28 October.

What 'scorecard positive' would mean

The Financial Times report, published on 14 October, said the Budget will be scorecard positive in 2029/30, the final year of the parliament, meaning additional discretionary spending is fully funded.

The government's self-imposed borrowing rules state that day-to-day spending must be met by tax revenues, with debt falling as a share of GDP. The country had a budget deficit of 4.4% of GDP last year, Reuters reported.

The Iran war has put additional pressure on Britain's public finances and left Healey with less headroom after meeting the fiscal rules, the report said. The finance minister is expected to let the headroom act as a contingency fund for times of economic stress. One person briefed on the preparations told the Financial Times that this would be the Chancellor's way of demonstrating fiscal responsibility.

Fuel duty and winter bills

Besides a targeted package to help with higher winter fuel bills, Healey is expected to drop plans to increase fuel duty by 3 pence a litre in January and 2 pence in March, according to the report. A Treasury spokesperson said the Chancellor's focus was on backing British jobs and giving families and businesses breathing space.

None of this is confirmed policy until the Budget is delivered. The report describes expectations from people briefed on preparations, and the final measures, costings and Office for Budget Responsibility assessment will only be known on 28 October.