UK Budget: Healey promises £100 towards energy bills, paid for by a higher tax on bank profits
Millions of households in England will receive a one-off £100 payment towards their energy bills, funded by doubling the tax on big banks' profits, Chancellor John Healey announced in his first Budget. Many larger decisions, including on defence and welfare, were pushed into next year.
John Healey presented his first Budget as Chancellor of the Exchequer to a packed House of Commons on Wednesday, 28 October, with Prime Minister Andy Burnham beside him on the front bench. In an hour-long speech he said he wanted to give struggling families "breathing space now" and "hope for the future" while the British economy is hit by what he called "global economic storms".
The headline measure is a one-off £100 payment towards energy bills for households in council tax bands A to D in England. The Welsh government said it would match the payment and the Scottish government plans to replicate it. Healey also said gas standing charges, the fixed daily fee on bills in England, Scotland and Wales, will be scrapped during 2027 or as soon as possible afterwards. The cost will move onto the unit price of energy, which means households that use a lot of gas will pay more.
The help is paid for mainly by banks. The surcharge on the profits of large banks rises from 3% to 6% from January until April 2028, and taxes on high-stakes gambling machines also go up. Other measures include extending the temporary 5p cut in fuel duty on petrol and diesel until July, a 3.9% rise in minimum wage rates from April, and a higher threshold for business rates on high street shops in England, from £12,000 to £18,000, with vape shops and adult gaming centres excluded.
Savers and landlords will pay more. Income tax thresholds stay frozen, and the tax rate on income from savings and property rental for basic-rate taxpayers will rise to 24% from April 2027, instead of the 22% previously planned. Healey did scrap a cut to the cash ISA allowance from £20,000 to £12,000 a year that his predecessor Rachel Reeves had announced last year.
The room for giveaways was limited: the UK is set to spend £14bn more on debt interest this year, and the Office for Budget Responsibility cut its growth forecast for next year to 1%. Conservative leader Kemi Badenoch said the plans were "not bold enough", describing a government that is "overspent, overborrowed, overtaxed" and struggling with an out-of-control welfare bill.