Chancellor John Healey has unveiled his first Budget, promising a "budget for the working people of Britain" with measures including scrapping gas standing charges, raising taxes on banks, and extending fuel duty cuts.
In his statement to MPs, Healey confirmed that standing charges on gas bills would be abolished, banks would face higher taxes, and a planned cut to the cash ISA allowance would be reversed. He also announced that fuel duty would not increase.
He told MPs: "This is a budget for the working people of Britain. For British businesses, big and small, delivered at a time when global uncertainties and pressures are swirling worldwide and hitting people here at home."
Energy Bill Relief and VAT Extension
Healey announced that millions of households in council tax bands A to D will receive a £100 payment to help with energy bills. The payments will be delivered through the council tax system, the Treasury said.
He told the Commons: "This winter, for 20 million households in council tax bands A to D, I'm announcing a £100 energy payment for households, paid directly into people's bank accounts to deal with rising energy bills. That's a £2.6billion scheme to take the pressure off in the coldest months and see people through to the spring."
The Scottish, Welsh, and Northern Ireland governments will receive their share to give all nations "breathing space on their energy bills this winter".
The Chancellor also confirmed that the VAT cut on electricity bills, announced in the first weeks of Andy Burnham's premiership, will be extended through the winter and until July next year. He told the Commons: "In the first week of this new government, we took VAT off electricity for 29 million households. Today, I am extending that VAT cut through the winter and spring to July, taking £50 off the annual price cap."
Wages, Gambling Tax, and ISA Changes
The national minimum wage and national living wage will increase by 3.9%. From April 1 next year, the National Living Wage will rise to £13.21 per hour, equivalent to an increase of £910 for a full-time worker. The National Minimum Wage for 18- to 20-year-olds will increase to £11.27 per hour.
Healey said he will raise gambling taxes to pay for a high street support package, including increasing machine games duty from 20% to 25% for higher stakes machines, while protecting pubs and seaside arcades.
The Chancellor announced he will reverse Rachel Reeves's planned cut to the cash ISA allowance, keeping the limit at £20,000 per year. He also said he will work with the sector to create a new 'Starter ISA' to reward first-time investors.
Bank Surcharge and Other Measures
The surcharge on bank profits will rise from 3% to 6% for 15 months, with the money used to boost Britain's high street. Healey said: "I've made my choice at this budget: asking a bit more of our banks to support ordinary people, raising taxes on gambling to support good growth on every high street."
The Chancellor also promised to end the Lifetime ISA penalty for those buying houses costing more than £450,000, and announced a new First Time Buyer ISA will replace the Lifetime ISA. He said: "I'm announcing that a new First Time Buyer ISA will replace the Lifetime ISA, and from today, I am dealing with the LIsa penalty. So if the home you want costs more than the limit, you will get back at least what you put in."
The planned increase in fuel duty has been scrapped, with the 5p cut extended until July 2027. Healey also announced the higher mileage rate will increase from 25p to 35p per mile.
Healey said the Government will scrap the Gas Shipper Obligation and directly fund hydrogen projects. He also announced that 70,000 more businesses will be taken out of business rates altogether, and confirmed an extra £1.5 billion for the Social and Affordable Housing Programme.
Britain will commit £10billion of additional economic and military support to Ukraine, and half a billion in urgent military funding this winter. Healey also announced a new deal for data centres, including a British data centre covenant with strict tests for investment in local communities, creation of local jobs, and protection of local water supplies.
