Britain’s Chancellor of the Exchequer, John Healey, holds up the red ministerial box outside No 11 Downing Street before departing to the House of Commons to deliver the first budget under Prime Minister Andy Burnham’s government on Oct. 28.
Britain announced a temporary increase in bank taxes on Oct. 28 to help fund household energy relief as Finance Minister John Healey presented his first budget.
The surcharge on bank profits, paid on top of corporation tax, will rise from 3 to 6 percent from January 2027 for 15 months.
“I am looking to our banks to help fund breathing space for British families,” Healey told parliament.
The package includes a £100 energy payment this winter for 20 million households in the four lowest council tax bands, A to D.
He also extended the five-pence-per-liter fuel duty cut and a VAT reduction on electricity bills until July 2027.
The government plans to remove fixed daily charges from household gas bills in 2027 or as soon as possible afterward, moving the costs into the price per unit of gas.
Higher borrowing costs constrain the government’s efforts to support households and businesses while meeting its fiscal rules. The Office for Budget Responsibility forecast economic growth of 1.2 percent this year, 1 percent in 2027 and 1.6 percent in 2028.
Healey said he retained a £15 billion buffer against the rule requiring day-to-day spending to be covered by tax revenues in 2029-30, while using some fiscal room to cushion the Iran war’s impact.
For retail, hospitality and leisure firms, the threshold for full relief from business rates, a tax on commercial premises, will rise from £12,000 to £18,000.
The change will exempt another 70,000 businesses, while others in those sectors will face no above-inflation increases for two years.
The national minimum wage and national living wage will rise by 3.9 percent, benefiting 2.3 million workers.
He scrapped plans to cut the annual allowance for cash individual savings accounts (ISAs), keeping the tax-free contribution limit at £20,000.
Healey also announced an additional £20.4 billion for the National Wealth Fund and British Business Bank over the coming years to support investment in British companies.
Next year’s spending review would set out how Britain aims to raise defense spending to 3 percent of gross domestic product in 2030 and meet its NATO commitment of 3.5 percent by 2035, he said.
