Chancellor John Healey has delivered his first Budget to the House of Commons, promising "breathing space" for households through measures including a minimum wage rise, support with energy bills and help towards owning a home.
Describing the Budget, Mr Healey said: "This is a Labour Budget for the worker, the sole trader, the parent at the school gate. The young person desperate to start their first job or start their first business."
He added: "These are my choices. Raising revenue from those who can afford to pay, no tax rises on wages or dividends, cutting taxes for millions of families and businesses. Just as the British people helped to support our banks 20 years ago, it is our banks that will help give families breathing space today."
Minimum Wage and Energy Bill Support
From April 1, 2027, the National Minimum Wage and National Living Wage will increase by 3.9% for 2.3 million workers. Workers on Living Wage will see their hourly rate increase to £13.21, while 18-20 year olds on Minimum Wage will receive £11.27 per hour.
Standing charges on gas bills will be scrapped from next year, which cover the cost of delivery to homes and businesses. The charges are added to bills, regardless of how much gas a customer uses, and cost around £108 per year for a typical household. Axing standing charges will mean fixed costs will be paid on the unit rate. The Treasury said this could save 60% of households an average of £45 on their annual bills.
A VAT cut on electricity will also be extended to July, which the Chancellor said would take £50 off the annual price cap. Furthermore, around 20 million households in council tax bands A to D will also receive energy payments of £100. In the North East, 92% of homes are in band A-D and will benefit from the £100 energy payment.
Fuel Duty and Parental Pay Changes
Mr Healey said he will extend the fuel duty cut until July 2027. He told MPs: "Earlier this year, the Government extended the 5p cut to fuel duty and slashed red diesel to its lowest rate in over 20 years."
"With the war in the Middle East still driving high fuel prices, I am extending these tax cuts for motorists through the winter and spring to July, supporting households, hauliers, and farmers."
"And for anyone who relies on their car for their work, from care workers to engineers, I am increasing the higher mileage rate from 25p to 35p per mile, and making permanent the increase to the standard mileage rate introduced earlier this year."
Parental pay will be extended to eligible self-employed fathers, partners and adopters in Britain from April 2029. Those who are recently employed or unemployed, or with a broken or irregular pattern of employment, and therefore do not qualify for statutory paternity or adoption pay will also benefit providing that they have sufficient work and earnings history.
Help for First-Time Buyers
The Chancellor said he will fund the Your First Home equity loan scheme for first-time buyers with £4.7 billion of Government-backed lending. The move is said to support 70,000 first-time buyers with up to 20% government equity loans.
Participants will benefit from a reduced deposit requirement and a five year interest free period, which will save the typical buyer hundreds of pounds a month. Mr Healey said: "Hope starts with a home. A route of the streets, a secure home to raise your kids, the keys to your own front door - delivered to the people by this Labour government."
