By Salma El-Sakka
UK Chancellor John Healey unveiled his first budget on Wednesday, announcing a £100 winter payment for 20 million English households while raising taxes on banks and landlords to cover the cost.
Cost-of-living package
The £2.6bn handout will go to households in council tax bands A-D, with funding also allocated to Scotland and Wales for similar schemes. Healey said the measure aims to give families “breathing space” as energy bills surge amid the Iran conflict.
Tax increases
The giveaway is financed by doubling the bank profit surcharge to 6% for 15 months and a 2p rise in tax on income from property and savings. The Office for Budget Responsibility warned the property tax could push up rents by deterring landlords.
Business measures
Healey cancelled planned fuel duty increases, extended a VAT cut on electricity until next summer, and raised the rates relief threshold for retail, hospitality and leisure firms to £18,000, funded by higher taxes on gambling and vape shops.
Bleak economic outlook
The OBR painted a grim picture, forecasting inflation near 4%, growth of just 1% next year, and virtually no growth in real disposable income until 2030-31. The chancellor pledged to meet Labour’s fiscal rules, though headroom shrank to £15bn by 2029-30.
Criticism and reaction
Think tanks criticised the targeting of the £100 payment, arguing more generous support for the poorest was needed. The Institute for Fiscal Studies warned tight spending plans will make next year’s spending review extremely tough.
Other announcements
The budget also eased migration salary thresholds for some sectors, gave London mayor Sadiq Khan powers to extend the Bakerloo line and secured a stop for cross-Channel trains at Stratford International, while setting aside funds to explore a northern Olympic bid.
