Help is on the way... if you're on benefits! Healey's Budget promises 'breathing space' on energy bills - but could drag millions deeper into tax

John Healey is delivering his first Budget pledging 'breathing space' for hard-pressed families - but will focus help on benefits claimants.The Chancellor is struggling to balance the books amid the Middle East crisis and Andy Burnham's spending ambitions. He insisted the fiscal package is for the 'working people of Britain', saying he would lower headroom against his fiscal rules from the £24billion previously to £15billion to help deal with global economic 'storms'. But while the Government has been talking up support for spiralling living costs, it will mostly be targeted.Homes in council tax bands A-D will get a £100 payment to help with energy bills, worth £2.6billion. The stripping of VAT from electricity bills is being continued until July, although that will be swallowed up by a projected 27 per cent increase in the energy cap in the New Year.The Chancellor signalled a longer-term move to strip green levies from energy bills and de-link the gas and electricity markets Mr Healey has set aside £5.5billion to uprate benefits paid to 10million people by 3.5 per cent, in line with inflation. And any welfare reforms have been kicked off until later in the Parliament.Earlier, consumer champion Martin Lewis was invited into Downing Street as Mr Healey announced that standing charges will be scrapped from gas bills. The MoneySavingExpert founder has long campaigned for the move. However, the £108-a-year levies will not be removed until at least next year - and many bigger families will end up being worse off, as the costs will be moved on to unit costs for gas. The judgements of the Office for Budget Responsibility watchdog over the path of the economy will be critical today. Analysts believe Mr Healey has been handed some wriggle room from higher inflation, which is likely to push up earnings faster than anticipated. That would mean millions of people being dragged deeper into the tax system, as the 'stealth' raid from frozen income tax rates is due to remain in place until 2031.The revenues could offset the fallout from higher costs as a result of the Iran war, according to the Institute for Fiscal Studies - although it will put huge strain on spending plans. Mr Healey said interest on the UK's debt mountain is forecast to cost an extra £14billion this year. In other announcements as the Chancellor promises a 'steady as she goes' Budget today:The OBR upgraded growth forecasts for this year from 1.1 per cent to 1.3 per cent, but trimmed forecasts from 1.6 per cent to 1.1 per cent; Energy bills support could be funded with a raid on banks, but shares have been surging amid speculation it could be smaller than thought and temporary; A scheduled fuel duty hike is expected to be dropped to ease the suffering for motorists; Labour is dropping Rachel Reeves' plans to slash the cash ISA allowance from £20,000 following a backlash;The Budget is said to assume that the Rosebank oil project in the North Sea will be approved, despite resistance from ministers and Labour MPs;The minimum wage will be increased by 3.9 per cent from April, but Labour looks to have ditched the drive to equalise the rate for under-21s;Lowest-income pensioners could get a special tax allowance to prevent them being drawn into tax by the state pension rise in April; Government briefings have suggested there will be a major move on Mr Burnham's devolution drive;The PM has tried to quash Cabinet unrest over his bid to unwind Brexit, insisting he wants a 'better deal for Britain'. John Healey is delivering his first Budget pledging 'breathing space' for hard-pressed families - but will focus help on benefits claimants The Commons chamber was packed for the long-awaited set-piece today John Healey struck the traditional pose with his Red Box and team outside No11, before heading to the Commons to unveil the crucial fiscal package Mr Healey laid out the details of the Budget to the Cabinet this morning, before striking the traditional pose with his Red Box and team outside No11.Ahead of the Commons set-piece, he acknowledged the country was facing a 'difficult moment' and promised changes would be made 'responsibly' within Labour's fiscal rules.He said: 'Breathing space for today and fresh hope for the future. That's what today's Budget will deliver.'The world's a highly uncertain place. Conflicts abroad are pushing up energy prices, and the cost of living here at home is piling pressure on families, on businesses, and on our public finances.'But Britain's economy is showing real signs of resilience: investments up, productivity is growing, and we had the joint fastest growth in the G7 in the first half of this year.'Mr Healey added: 'This Budget is designed to give households breathing space from some of the everyday costs, provide targeted support for businesses and self-employed people, and to start the long-term action needed to get energy costs down for good.'The Chancellor was accused of an 'insult to families' yesterday after the Treasury revealed measures will include tariff reductions worth just 40p a week off average grocery bills, including cutting the price of gherkins.Sources said Mr Healey would not set out welfare reforms, despite official projections suggesting sickness benefits will jump from £83billion last year to £109billion by the end of the decade.He is expected to outline modest increases in defence spending as well, including filling a £5billion hole in the Defence Investment Plan by cutting Net Zero and road projects.But he is not expected to commit to raising defence spending to 3 per cent of GDP by 2030, despite resigning as defence secretary over the issue earlier this year.Government sources said Mr Healey is planning a low-key 'steady as she goes' Budget after Ms Reeves imposed record tax hikes in Labour's first two years.That left the tax burden heading towards its highest ever proportion of GDP, driven by the long-running freeze on tax thresholds. John Healey invited consumer champion Martin Lewis into No11 this morning as he announced that standing charges will be scrapped from gas bills The Institute for Fiscal Studies has suggested the OBR is likely to upgrade earnings forecasts amid higher inflationOpposition MPs warned that Britain cannot afford to duck welfare reform again. Shadow treasury minister Richard Fuller said: 'Britain's public finances are on a cliff edge. 'A "do nothing" Budget will not solve the problems staring us in the face: a spiralling welfare bill, a crippling tax burden, mounting debt and rising global threats.'When we see the Budget, we must ask: Is it fair to take more and more money from hard-pressed working families just to spend it on more benefits? 'Will more tax hikes and more borrowing make us better off? Labour are running scared of the big decisions necessary to get our country back on track.'