Chancellor John Healey is set to extend the freeze on NHS prescription charges in his first Budget, maintaining the current fee of £9.90 per item until at least April 2028. This continuation follows a freeze initially introduced two years ago by former Chancellor Rachel Reeves and aims to provide financial relief to households amid ongoing economic pressures.

The prescription charge freeze, which prevents a roughly 20p annual increase, will cost the Treasury an estimated £15 million to maintain. Prescription fees have risen from £8.80 in 2018 to the current level over the past five years before the freeze was implemented. Nevertheless, the majority of prescriptions remain free of charge for eligible groups including children, pensioners, pregnant women, and certain health condition sufferers. It is important to note that prescriptions dispensed by private providers do not fall under the NHS free prescription scheme.

Alongside the prescription charge freeze, Healey’s Budget will introduce additional measures aimed at easing the cost of living. These include expanding parental pay to cover more than 150,000 parents, including self-employed fathers, with eligible recipients set to receive £194 per week during a two-week leave period. The Chancellor is also expected to maintain the 15-year freeze on fuel duty, which has remained at 52.95p per litre since 2011, and make the 55p tax-free mileage rate for business travel a permanent measure. The mileage rate currently benefits around three million people who use their own vehicles for work purposes.

Despite these policies, sources indicate that Healey will not extend the existing freeze on rail fares, which is scheduled to expire in April. The Budget is also unlikely to continue the VAT reduction on energy bills announced in July, a measure set to end in March 2025. The VAT cut currently saves households an average of £45 annually. However, officials have suggested the government may revisit this policy outside of the fiscal announcement, meaning its discontinuation in this Budget does not preclude future extension.

The Chancellor’s first Budget has been described by some observers as conservative and cautious, with major decisions on welfare and defence spending deferred to a later date. Healey plans to outline a spending review next year that will commit to raising defence expenditure to 3 percent of GDP. As a precursor, he will announce borrowing of £20.4 billion to fund investments through the National Wealth Bank and British Business Bank over the next five years. The government expects these investments to support or create approximately 100,000 jobs, focusing on sectors such as artificial intelligence, defence, and green energy by 2035.

While this investment aims to bolster economic growth and innovation, analysis by the Institute for Public Policy Research flags that the additional debt servicing costs could reduce the government’s fiscal flexibility by around £1 billion annually by 2029-30.

Prime Minister Andy Burnham emphasized the government’s commitment to addressing both immediate financial challenges facing households and longer-term national priorities. As part of wider cultural engagement, Burnham and his wife, Marie-France Van Heel, recently participated in Diwali celebrations at 10 Downing Street, symbolizing the government’s recognition of diversity and community cohesion.