The United Kingdom's government has set out its first budget since Andy Burnham became prime minister and Labour leader three months ago. Chancellor of the Exchequer John Healey presented the Autumn Budget on Wednesday, describing it as a package for the "working people of Britain" after a steep fall in living standards in recent years.

Healey said the measures would give the country "breathing space" following years of economic stagnation that he linked to austerity, Brexit, the coronavirus pandemic, privatisation and rising energy prices.

Energy costs were a central concern. Global fuel prices have climbed in recent months because of the US-Israel war on Iran, which led Tehran to close the Strait of Hormuz, a waterway through which about 20 percent of the world's oil and liquefied natural gas normally passes. Healey said 20 million households will receive a one-off 100 pound ($133) payment toward energy bills. Homes valued at 88,000 pounds ($117,000) or less qualify, based on prices from April 1991 rather than current values. A temporary VAT cut will also be extended until 1 July, lowering the annual price cap by 50 pounds ($66.50).

Economist James Meadway, co-director of the left-wing think tank Verdant, told Al Jazeera the steps are "not nothing" but fall well short of the problem people face, which he said government figures expect to worsen over the next year. Earlier on Wednesday, the Office for Budget Responsibility said it expects no growth in real earnings next year and cut its 2027 growth forecast to 1 percent from 1.5 percent. Meadway said forecasts point to this Parliament being the worst for living standards in modern history, and that the budget was "nothing like enough".

On defence, Healey said he would fund an additional 15 billion pound ($20bn) Defence Investment Plan and cover a 4.7 billion pound ($6.2bn) gap by reprioritising budgets in other departments. He did not explain how the UK would reach the NATO target of spending 3.5 percent of GDP on defence by 2035, with an interim goal of three percent in 2030, saying he would address this in a spending review next year. NATO Secretary-General Mark Rutte welcomed the plan on X, citing a "strong commitment on defence". Healey also pledged an extra 10 billion pounds ($13.2bn) in economic and military aid for Ukraine.

On pay, the National Minimum Wage and National Living Wage will both rise by 3.9 percent in April. The minimum wage currently stands at 10.85 pounds ($14.44) an hour for workers aged 18 to 20, while the living wage is 12.71 pounds ($16.91) for those aged 21 and over.

To help fund support for households and businesses, the Bank Corporation Tax Surcharge will temporarily double from three percent to six percent. The increase will run for 15 months until March 31, 2028, and is expected to raise 1.5 billion pounds ($2bn).

Housing also featured. Office for National Statistics data show 35 percent of men aged 20 to 35 lived with their parents last year, against 22 percent of women in that age group. Healey announced a First Time Buyer savings account, launching in 2029 to replace the Lifetime ISA. Details remain unclear, but it will carry the same 25 percent bonus on deposits of up to 4,000 pounds ($5,320), worth up to 1,000 pounds ($1,330) a year.

The penalty for first-time buyers using Lifetime ISA funds to buy a home worth more than 450,000 pounds ($598,853) will fall immediately to 20 percent from 25 percent, meaning savers will get back at least what they paid in. A further 432 million pounds ($574.9m) will be spent over two years to reduce rough sleeping, which Burnham has pledged to end.