UK: Healey gives 20 million households £100 energy payment
In his first budget, Chancellor John Healey raises the minimum wage by 3.9%, scraps gas standing charges and doubles the bank surcharge.
Archive image · Photo: Chris McAndrew / Wikimedia Commons, CC BY 3.0 (cropped and resized)
British Chancellor John Healey presented his first budget on Wednesday, aimed above all at cushioning the impact of high energy prices. Around 20 million households in council tax bands A to D will receive a one-off £100 payment (about €120) directly into their bank accounts, at a cost of £2.6 billion. Gas standing charges are scrapped, and the VAT cut on electricity is extended to July. The 5p fuel duty cut is also extended to July. "This is a budget for the working people," Healey said.
The National Living Wage rises by 3.9%, taking it above £13 an hour for the first time; according to LBC, around 2.3 million of the lowest-paid workers benefit. Part of the funding comes from banks: the surcharge on profits above £100 million rises from 3% to 6% from January for 15 months. From April 2027, income from property and savings will be taxed two percentage points higher. The planned cut to the cash ISA limit from £20,000 to £12,000 has been dropped.
The Office for Budget Responsibility expects growth of 1.2% this year and 1.0% next year. Public debt currently stands at 83.2% of GDP. Ukraine receives an extra £10 billion in support, mainly through loans and export guarantees. Opposition leader Kemi Badenoch said Healey needed to get welfare and taxes down. Critics also warn that the higher minimum wage could force businesses into layoffs or price rises.