Healey's First Budget Gives £100 Energy Payment, Doubles Bank Tax

Chancellor John Healey announced a one-off £100 payment to help households cover energy bills in his first Budget, funded in part by raising the tax on bank profits, according to the BBC. Healey told the House of Commons he wanted to give families "breathing space now" and "hope for the future" as the UK economy faces "global economic storms," the BBC reported.

Who qualifies for the £100 energy payment?

The payment goes to households in council tax bands A to D in England, the BBC reported. The Welsh government said it will match the payment, and the Scottish government said it plans to "replicate" it, according to the same report.

How much more will banks pay in tax?

Healey raised the tax on big bank profits from 3% to 6%, a rate that will run from January 2027 to April 2028, the BBC reported. He also increased taxes on high-stakes gambling machines as part of the revenue package.

What other changes affect energy bills?

Gas standing charges in England, Scotland and Wales are set to be scrapped during 2027 "or as soon as possible after," with those fixed daily fees shifted onto the price of each unit of gas, meaning heavy users will face higher bills, the BBC reported. The chancellor also extended the 5p "temporary" cut in fuel duty on petrol and diesel to July and confirmed minimum wage rates will rise 3.9% in April, though the gap between rates for older and younger workers will not narrow, according to the BBC.

What happens to income tax and savings taxes?

Income tax thresholds will stay frozen, continuing a policy HTT News has reported extends until April 2031. The tax on income from savings and property rental will rise to 24% for basic-rate taxpayers from April 2027, up from a previously planned 22%, the BBC reported. A cut to the cash ISA allowance from £20,000 to £12,000, announced last year by Healey's predecessor Rachel Reeves, was scrapped, according to the BBC.

To help high street businesses, Healey raised the threshold at which shops in England start paying business rates from £12,000 to £18,000, excluding vape shops and adult gaming centres from the relief, the BBC reported.

How did the opposition respond?

Conservative leader Kemi Badenoch said the plans were "not bold enough" and accused the government of being "overspent, overborrowed, overtaxed and drowning in an out-of-control welfare system," according to the BBC.

What does the OBR forecast say about growth?

The Office for Budget Responsibility downgraded its growth forecast for next year to 1%, with slightly higher increases projected in subsequent years, the BBC reported. The watchdog said British households are on track to be little better off than before the Covid pandemic even a decade after the virus hit. Healey confirmed that major decisions on defence spending and welfare will not be made until next year, while the UK is set to spend £14 billion more on debt interest payments this year, according to the BBC.

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