Chancellor of the Exchequer John Healey delivered his first Budget in Parliament on Wednesday afternoon (October 28), announcing that 20 million UK households in council tax bands A to D will receive a £100 energy payment paid directly into their bank accounts this winter.
The payment forms part of a £2.6bn scheme designed to ease pressure during the coldest months and help see people "through to spring," as stated in the Budget speech delivered in the House of Commons at 12.30pm.
How to check your council tax band
Council tax bands are determined by the property's value on 1 April 1991. The lower the value, the lower the band, which runs from A to H for properties in England.
Residents can find their band on their council tax bill, or use the government's tool on the gov.uk website by entering their postcode or address. However, on Wednesday afternoon the tool appeared to be experiencing issues, with error messages reading: "Sorry, there is a problem with the service. Try again later." and "Sorry, this service is unavailable. You'll be able to use the service later."
Budget announcement details
Speaking during his Budget speech, Mr Healey, the former defence secretary, said money would be given to devolved administrations and called on them to "do the same and give people of all nations in the UK breathing space on their energy bills this winter".
The Chancellor said: "Let me say this to families at home. I know that with the conflict in the Middle East, rising energy bills are a real worry. I know that people look to Government at times like this, not to solve all their problems, but to give them a bit of breathing space."
"So today I'm taking one further step. This winter, for 20 million households in council tax bands A to D, I am announcing a £100 energy payment for households, paid directly into people's bank accounts to deal with rising energy bills."
Other measures in the Budget
Standing charges on gas bills, a fixed daily fee added regardless of usage, will be scrapped from next year for around 23 million homes, with similar reforms for energy bills set to follow. The charges cost around £108 per year for a typical household. The Treasury said Chancellor John Healey will ask regulator Ofgem to remove the charges "in 2027 or as soon as possible after", with fixed costs instead paid on the unit rate, potentially saving 60% of households an average of £45 on annual bills.
The VAT cut on electricity will be extended to July, taking £50 off the annual price cap. Mr Healey told the Commons: "In the first week of this new Government, we took VAT off electricity for 29 million households, today I'm extending that VAT cut through the winter and spring to July, taking £50 off the annual price cap."
For businesses, a new British industrial competitiveness scheme will take 25% off electricity bills for 10,000 firms, going live in April with backdated payments for energy costs this year.
The fuel duty cut will be extended until July 2027, with the 5p cut and reduced red diesel rate maintained. The Chancellor also announced an increase in the higher mileage rate from 25p to 35p per mile, and making permanent the increase to the standard mileage rate introduced earlier this year.
