Budget 2026: John Healey announces £100 off energy bills for 20m households
Millions of households will receive £100 to help with soaring energy bills and high street firms will get a tax break as John Healey sought to protect British workers and businesses from the economic impact of the Iran war.
The Chancellor said the UK was being battered by a global economic storm, with the Budget watchdog slashing its forecast for gross domestic product growth next year.
The public finances have also taken a battering, with the cost of borrowing soaring and the UK spending £14 billion more on debt interest this year, Mr Healey said.
The Chancellor told MPs: “Those are the storms we face. We can’t wish them away. We must choose the course we steer through them.”
Mr Healey hiked taxes on banks and gambling firms to provide “breathing space” he promised for households and high street businesses.
He said the Office for Budget Responsibility (OBR) had identified the war in the Middle East as the key driver in the economic forecasts.
But he promised “to steer us through the global economic storms today, to chart a new course for Britain in the years ahead, to give people fresh hope for Britain’s future”.
The energy bills support package will cost £2.6 billion, with around 20 million households in council tax bands A to D receiving £100 from the Government this winter to help with the bills.
The support will reach 80 per cent of households in England, 83 per cent of fuel-stressed households, and 88 per cent of those in the bottom three income deciles, the Government estimates.
Recipients can spend the cash landing in their bank account from January as they wish.
Mr Healey said he was “looking to our banks to help fund breathing space for British families”, with the bank tax hike by an extra 3% for 15 months from January.
Mr Healey also announced an increase in gambling taxes to pay for business rates relief for high street firms.
He said it would mean that 70,000 businesses would be taken out of paying rates altogether “meaning half of our shops, restaurants and gyms will now pay no business rates at all”.
Despite the economic difficulties, the Office for Budget Responsibility increased its forecast for economic growth in 2026 from 1.1 per cent in March this year to 1.2 per cent.
But the forecast for gross domestic product (GDP) growth was slashed from 1.6 per cent to just 1.0 per cent in 2027.
Institute for Fiscal Studies director Helen Miller said that the Budget has “a raft of fiddly measures but very little that will move the dial on growth”.