Is this 'breathing space', Chancellor? Healey vows to trim energy bills in first Budget today - but is set to drag millions deeper into tax system

John Healey is vowing to give the country 'breathing space' today as he delivers his first Budget - but will focus help on benefits claimants.The Chancellor will unveil a crucial fiscal package at lunchtime, as he struggles to balance books amid the Middle East crisis and Andy Burnham's spending desires. He invited consumer champion Martin Lewis into No11 this morning as he 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 some bigger families will end up being worse off, as the costs will be moved on to unit costs for gas. Help with soaring energy bills from January is also likely to be targeted on the poorest, with a rise in the £150-a-year Warm Homes Discount that can be claimed by those on benefits. Mr Healey has set aside £5.5billion to uprate benefits paid to ten million people by 3.5 per cent, in line with inflation. Major welfare reforms have been delayed until later in the Parliament. 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 might also opt to lower his £24billion headroom against fiscal rules instead of cutting spending or raising taxes.In other announcements as the Chancellor promises a 'steady as she goes' Budget today:Energy bills support could be funded with a raid on banks, despite warnings about the impact on mortgage rates and the financial sector; The Chancellor could signal a longer-term move to strip green levies from energy bills and de-link the gas and electricity markets; 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;Government briefings have suggested there will be a major move on Mr Burnham's devolution drive. John Healey invited consumer champion Martin Lewis into No11 this morning as he announced that standing charges will be scrapped from gas bills Mr Healey will lay out the Budget to the Cabinet this morning, before posing for the traditional photos outside No11 with his Red Box.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. Mr Healey and Andy Burnham preparing for the Budget earlier this weekOpposition 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.'