John Healey Unveils First Budget with Energy Relief and Bank Taxes
Chancellor John Healey delivered his first budget, introducing a £100 energy payment for millions of households and scrapping gas standing charges to combat cost-of-living pressures.
Chancellor of the Exchequer John Healey delivered his first budget on October 28, 2026, focusing on providing breathing space for households amid global economic instability and rising energy costs driven by conflict in the Middle East. The budget introduces a £2.6 billion energy support scheme, providing a one-off £100 payment to approximately 20 million households in council tax bands A to D. To fund this, Healey implemented a temporary increase in the bank corporation tax surcharge from 3% to 6% for 15 months.
In a major energy market reform, the government will scrap standing charges on gas bills starting in 2027, a move estimated to save 60% of households an average of £45 annually. Other cost-of-living measures include extending the VAT cut on electricity and the 5p fuel duty freeze through July 2027, increasing the national minimum wage by 3.9%, and removing import tariffs on over 100 supermarket products. For pensioners, a new tax allowance ensures those with income up to the full state pension pay no income tax.
Fiscal discipline remained a priority, with Healey maintaining the freeze on income tax thresholds and ruling out increases to capital gains tax. However, he introduced a £4.3 billion tax increase targeting landlords and savers. The budget also allocated £10 billion in support for Ukraine and outlined a path toward spending 3.5% of GDP on defense by 2035.
Opposition reactions were sharp. Conservative leader Kemi Badenoch criticized the lack of immediate defense funding and the avoidance of welfare cuts, while the Scottish Government and Scottish Greens argued the measures failed to address the scale of the crisis or tax oil and gas profits.
