By Ahmed Abdelsalam
Chancellor John Healey unveiled a £100 energy bill payment for around 20 million households in council tax bands A to D during his autumn Budget statement on Wednesday. The measure, costing £2.6 billion, aims to provide "a bit of breathing space" for families facing rising energy costs amid Middle East tensions.
Energy Bill Support and VAT Cut
The payment will be made directly into bank accounts this winter. Alongside it, the temporary zero rate of VAT on electricity will be extended through July, reducing the annual price cap by £50.
Other Key Measures
Healey also extended the fuel duty cut until July 2027, announced a 3.9 per cent increase in the minimum wage, and introduced a temporary rise in the bank corporation tax surcharge from 3% to 6%, bringing the combined headline rate to 31%.
Economic Forecast Downgraded
The Office for Budget Responsibility cut its GDP growth forecast for next year to 1 per cent, down from 1.6 per cent in March, while raising this year's outlook to 1.2 per cent from 1.1 per cent. The OBR also warned inflation would hit 3.5 per cent next year, up from a previous 2 per cent estimate.
Rough Sleeping Funding
The Budget includes a further £430 million to offer "everyone sleeping rough a route off the streets" in coming winters, building on Prime Minister Andy Burnham's pledge to end rough sleeping.
Reactions and Analysis
Business groups welcomed the smaller-than-feared bank tax rise, which boosted bank shares. However, hospitality leaders warned the minimum wage increase without sufficient sector support could force closures. Money advice experts cautioned that using council tax bands to target the £100 payment is a blunt instrument that may miss some low-income households.
