Madeleine Lake
Live reporter

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In his first major speech as chancellor, John Healey spoke of a Britain "turning a corner" while acknowledging that borrowing costs remain high.

He said fiscal discipline remains the "first priority" as he announced a £150m fund to help northern scale-up businesses and plans for a roadmap to fiscal devolution to return power into the hands of local leaders.

The chancellor said he's looking at policies that can help the private sector flourish, including changes to the Treasury's Green Book to help projects with long-term potential. And he cautiously embraced the opportunities AI has to offer, adding that the technology won't be allowed to proliferate "with no oversight" on his watch.

As he spoke, Jaguar Land Rover announced 4,000 job cuts, prompting the chancellor to later tell the BBC that the announcement is "a sign of how tough it is" for business at the moment.

Healey also refused to be drawn into speculation about the upcoming Budget, responding to questions about potential tax rises by saying Labour had made "very strong, very clear and very specific" pledges in the 2024 manifesto.

The Institute for Fiscal Studies, while welcoming Healey's commitment to growth and fiscal discipline, said "details are going to matter" - but the full picture of the government's economic plans will only emerge on 28 October.

We're ending our live coverage here, but you can read more about this in our story.

We've heard a lot about rising government borrowing costs in recent weeks.

This matters for regular households because it can squeeze how much the government is able to spend - including on things like policies to ease the cost of living.

It can also put pressure on the government to raise taxes.

Your personal finances can feel the effects too - for example, mortgage rates on new deals can go up when government borrowing costs rise.

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With the Budget only a few weeks away, Chancellor John Healey has said he wouldn't respond to tax speculation but he reminded attendees at his speech this morning that Labour made "very strong, very clear, very specific" commitments in its 2024 manifesto.

But what commitments were those?

• Taxes: Labour said it would ensure taxes on working people are kept "as low as possible", adding that it would "not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT"
• VAT: A Labour government would introduce 20% Value Added Tax to private school fees to pay for extra teachers
• Changes to non-dom status: Labour pledged to abolish non-dom status - granted to UK residents whose permanent home or domicile for tax purposes is outside the UK - once and for all, replacing it with a residence-based regime
• Inheritance tax: The party also pledged to end the use of offshore trusts to "avoid inheritance tax" and to ensure everyone who makes their home in the UK pays their taxes there too

Shadow chancellor Andrew Griffith has criticised John Healey saying he failed to address "any of the big issues" in his speech, with nothing on "ruinously high energy costs" or "the kind of welfare reform that would let him rule out tax rises".

"After the record increase in both tax and additional debt that we've seen from the last two Budgets... the chancellor should be providing the certainty that we need by ruling out tax rises," he says.

"You can't tax and spend or nationalise your way to growth," he adds, saying businesses instead need to be allowed "to hire, to grow, to invest".

He calls the job cuts announced by Jaguar Land Rover this morning "a real tragedy", blaming challenges in the sector on high energy costs, the cost of employment, and a government emissions policy.

The director of the Institute for Fiscal Studies (IFS) says it is "good to hear" the chancellor is "serious about economic growth and fiscal discipline", but believes his speech was light on detail.

"Much of his speech could have been given by actually any chancellor," Helen Miller tells BBC News.

The "focus on investment innovation and jobs is one that's become very familiar across lots of these kind of growth speeches," she says, acknowledging that devolution is a "newer emphasis".

But again, "the details are going to matter", she says, adding that we will probably have to wait for next month's Budget.

Miller says she "would have liked a clearer sense on what Healey is going to do when he can't do everything".

Healey's tone less gloomy than Reeves but still focused on fiscal disciplinepublished at 12:48 BST

12:48 BST

Iain Watson
Political correspondent

This wasn’t a tour de force of rousing rhetoric, but what we did have was Healey saying there are areas where the government can boost growth.

One very specific change he suggested was essentially giving regional mayors a share of income tax by 2028 - and greater freedom to decide how the money is spent in their own areas.

On other areas like welfare, he didn’t come out with any specifics today. But he did reference the "moral" and "fiscal duty" of getting young people back into work.

Some very technical areas were mentioned too - such as changes to the Treasury’s Green Book to facilitate longer-term investment.

Certain areas of his speech raised more questions than they answered. He said he’s going to reduce the regulatory burdens on businesses by 25% but it’s unclear what that might look like.

And in response to specific questions about the Budget, he refused to speculate.

Although his tone was less gloomy than that of Rachel Reeves, he did say he would build on her fiscal discipline. In other words: Don’t expect a big borrowing fest.

This may also have been an effort to calm the nerves of the bond market.

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Healey also says he and the prime minister are in "lockstep" on meeting Nato defence spending requirements of 3.5% of GDP by 2035.

When BBC economics editor Faisal Islam puts to him that he resigned as defence secretary just months ago over the government's inability to commit to spending 3% by 2030, Healey says this is not the case.

"I resigned on the fact that we were not making enough of a commitment to defence, and we will do that now," he says.

Fully funding the defence investment plan in the upcoming Budget is the first step, Healey says, followed by a spending review which will "set out a clear path to how Britain will meet that Nato 3.5% commitment" by 2035. "We will set a target date for that 3% along the way," he adds.

The BBC's economics editor Faisal Islam has spoken with John Healey after his first major speech as chancellor this morning - asking about the 4,000 job cuts announced by Jaguar Land Rover (JLR) this morning.

"It is a sign of how tough it is," Healey says, adding that JLR made these decisions to stay competitive in a global market.

He acknowledges it's a "worrying time for workers and suppliers", but says JLR is part of a "strong manufacturing base that we can build for the future".

Healey says the West Midlands mayor has announced a £500,000 support fund to help these "really well skilled workers" find new work and "new opportunities to build their careers".

The economy has been more resilient than some feared. But reality is still bitingpublished at 12:12 BST

12:12 BST

Dharshini David
Deputy economics editor

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The new Chancellor John Healey was aiming to lift spirits.

After all, analysts warned his predecessor’s warnings of black holes and tax rises may have left households nervy about spending, and businesses hesitant to expand, hire and invest - vital components for a flourishing economy.

Sentiment matters – and the economy has been more resilient than some feared. But reality is still biting.

Even as the chancellor talked, details of job losses at the nearby carmaker Jaguar Land Rover (JLR) were being shared. And over 100,0000 jobs were lost in retail and hospitality in the last year.

The chancellor promises to boost growth by devolving more spending decisions – but the evidence if that works is mixed; it’s all in the execution.

And then there’s fiscal reality. John Healey, like Rachel Reeves, emphasised a tight grip on the finances, unsurprising given recent market jitters.

Some analysts think £10-15bn of extra funds may need to be found in the Budget, to keep the public finances on an even keel; the government has already curbed some ambitions.

Growth is the answer to many of these woes – but getting there is the hard part, and there is still much to be fleshed out.

Chancellor John Healey has just given his first speech since taking over the Treasury in July. With pressure piling up, and a little under two months to go before the Budget, here's what we heard:

• Local growth: Healey announced £150m fund to support the most innovative scale-ups in the north. And a new initiative, the Northern500, will bring together the most ambitious mid-sized businesses into one community
• Fiscal devolution: A roadmap to fiscal devolution will be set out plans for a permanent transfer of power and resources to the regions. This will lead to greater business rates retention for local councils and strategic authorities, and the replacement of grants from central government with a share of local income tax for every mayoral strategic authority beginning in 2028
• Tax rises? Healey said he won't respond to tax speculation ahead of the Budget, adding that Labour made "very strong, very clear, very specific" commitments on tax in its 2024 manifesto
• The economy: Fiscal discipline remains the "first priority", Healey added before saying that his mission is to "make Great Britain, growth Britain"
• AI: The chancellor said he will not allow the opportunity of AI to "pass Britain by" while also pledging not to let the technology proliferate "with no oversight"
• Youth unemployment: He said the government has a "moral" and "fiscal" duty to address the "scar" of youth unemployment, and to create opportunities for people of all ages - with a focus on those not in employment, education or training (Neets)

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More reaction now as Liberal Democrat Treasury spokesperson Daisy Cooper says John Healey failed to acknowledge that the "huge costs facing business" were saddled on them by the Labour government.

Cooper says the chancellor will have to come up with a "far more radical vision" if he is serious about unleashing economic growth.

Reform UK Treasuryspokesperson Robert Jenrick says Healey delivered a "dire speech that will change nothing" and failed to reassure the markets as it included "nothing about cutting wasteful spending".

"Healey’s beginning to make even Rachel Reeves seem inspiring. He’s 49 days into the office and he’s out of ideas already," Jenrick writes on X.

The chancellor is promising "a new economic vision of the future" but ultimately delivering "more of the same", says Green Party Treasury spokesperson Dr Ellie Chowns.

The "biggest priority" remains "building economic prosperity that is sustainable, equitable and genuinely meaningful", she adds.

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The Conservatives' new shadow chancellor Andrew Griffith says John Healey is sounding "increasingly like continuity Rachel Reeves" following the chancellor's first speech since taking up the role.

"Warm words about growth will not make growth a reality or cover up the enormous damage Labour have done to businesses and family finances," says Griffith.

He says Healey has failed to end uncertainty over tax raises, failed to set out a "serious plan to reform welfare" and failed to "commit to funding defence properly".

"Even as Jaguar Land Rover cuts jobs, he offered no pause to Labour's job-destroying employment red tape and no measures to get ruinously high energy bills down."

Image source, Getty Images

While Healey was giving his speech, Jaguar Land Rover (JLR) announced it is to cut 4,000 jobs as it struggles with Chinese competition, US tariffs, and the transition to electric vehicles.

The cuts will happen over the next two years and will mostly affect the head office, which is based in the UK.

Chief executive PB Balaji said the firm was "committed to supporting everyone with care, fairness and respect" through the redundancy process.

• You can read more about the announcement in our story

Chancellor strikes more cautious tone on AIpublished at 11:04 BST

11:04 BST

Faisal Islam
Economics editor

Intriguing words from the chancellor on AI. We have heard comparatively little from the PM on an issue which has dominated the speeches of most world leaders.

While the chancellor said AI will transform the economy, every firm, community, hospital and school, he also acknowledged it will replace some jobs, and take up space and resources, a reference to data centres.

He said the government would “grasp the opportunities” but do so in a way that “guards” against risks to business and national security. He was especially focused on the idea that AI, unlike previous waves on new technology “self improves”- ie the models create better versions of themselves.

It sounded a little less cheerleading of AI, a little more focused on risks, than we heard from the Starmer administration.

Healey will not please MPs looking for substantial shift in policypublished at 10:58 BST

10:58 BST

Henry Zeffman
Chief political correspondent

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It was interesting to hear John Healey go out of his way early in this speech to praise Sir Keir Starmer and Rachel Reeves.

He hailed his predecessor as chancellor for recovering Britain’s fiscal discipline.

That was a clear and deliberate signal - especially to financial markets - that he wants to continue in that vein and is not going to be a profligate chancellor.

Yet there is an interesting political tension here. Healey is the chancellor, and not Reeves, because Starmer was ousted by Burnham.

Some of the Labour MPs who pushed for a change of leader did so because they wanted broadly the same governing approach, sold better. But others wanted a substantial shift in policy direction.

Those in the latter category will not find that much in this speech to encourage them.

Healey’s allies insist that while he does indeed want to build upon Reeves’s approach, his focus on boosting growth around the country as his first priority is a significant difference of emphasis.

In the final round of questions, Healey is once again asked if taxes will be raised and if Labour would scrap the pension triple lock to fund support for young people amid high youth unemployment.

The chancellor says Labour made "very strong, very clear, very specific" commitments on tax in its 2024 manifesto, adding that "this is what we are keeping".

"On tax specifics, I'm the chancellor less than two months out from the Budget, I'm not going to speculate on questions of tax," he says.

Answering a separate question before finishing, he explains how he will achieve his direction for growth given the challenging fiscal backdrop.

He says: "My defining mission as chancellor is growth, good growth in every postcode. And I've set out today the way this government will set about it: more devolution, more public leadership and control, more investment, more innovation, more jobs."

• The speech has now concluded. We'll bring you a round up of the top lines from Healey and analysis from our correspondents in the next few posts

Healey is then asked whether he'll consider corporation tax being devolved - and what promise he can make to voters about the "meaningful change" this government can deliver.

He says he won't respond to tax speculation ahead of the Budget on 28 October.

In terms of what's different now, he says this government is focused on "doubling down" on growth in more places, calling it the "first economic priority of this government".

He says it's about getting beyond that "long-term reliance" of "good growth in too few places". With more investment, innovation and jobs, the UK can start to lift the "level of growth" and the "level of hope", he says.

"That is the way we can start to tell a fresh story about Britain," he adds.

Image source, UK Pool

Moving on to questions, the chancellor is asked about the surge in cost of government borrowing and whether he can truly say that the economy is turning a corner, and is asked to rule out tax rises.

He says there is no doubt that global conflicts, trade tensions and an increasingly dangerous and uncertain world are weighing on the UK - making the task in government harder.

But he says he is setting out plans for growth and wants to be the chancellor that "gets things done", driving growth from more places in the UK.

He says Britain has great potential and strengths in how it can deal with the challenges it faces and reaffirms his commitment along with the PM to meet the fiscal rules and drive growth.

Healey concludes his speech saying that if his plan succeeds, young people will start businesses that will "storm to global scale", self employed people will have profits to "put back into their businesses" and Britain's economy will be "on the up".

"Of course, we will not deliver all this tomorrow, but we are delivering the start of it today," the chancellor says.

This plan, Healey says, will "guide the government" throughout the rest of the Parliament and through the prime minister's 10-year-plan.

Healey says the UK is "underusing the huge potential of Britain's workers", noting that there are nearly one million Neets in the country - that is people aged 16-24 who are not in employment, education or training.

Too many others are in jobs "that don't pay enough" or are "without the skills and opportunities to be able to get on", he adds.

This autumn, former minister Alan Milburn will set out his full recommendations to the government on "how to address this scar of youth unemployment", Healey says, calling it a "moral duty".

He says it is not right that so many young people in their 20s are "stuck on benefits" or "not looking for work".

He also calls it a "fiscal duty", saying a person who comes off benefits and gets into work "saves the taxpayer money" - which becomes a "win-win" when they also start paying tax themselves.