After the promises about breaking with the economic direction of the past 40 years, the budget felt a fairly cautious start.
A hundred quid helps. Then what?
The headline announcement was a £100 energy payment, due from January 2027 for households in England in council tax bands A–D. The Budget document sets out the details, alongside the extension of zero VAT on domestic electricity until July 2027 and the fuel-duty cut and freeze until 1 July.
I’m not going to sneer at £100. When money’s tight, that’s useful. And keeping fuel costs down matters to people who can’t simply swap the car for a conveniently timed bus.
But using council tax bands to decide who needs help seems a fairly rough way of doing it. Your property’s band doesn’t tell the government what’s left in your bank account after paying the mortgage, rent and childcare. It’s an administratively convenient shortcut, with the usual awkward cases around the edges.
More encouraging is the additional £1.5bn for around 10,000 social and affordable homes in England, prioritising social rent, particularly council housing. That deserves credit. A home at a genuinely affordable rent could make a much bigger difference to someone’s monthly finances than an occasional payment towards the heating.
Of course, the money has been announced; the homes still need building. I’d be much more interested in following that through than watching another round of ministers congratulating themselves on Budget day.
The banks can probably put the champagne away… eventually
Beforehand, there was talk of restoring the bank surcharge to 8%. What Healey actually announced was an increase from 3% to 6%, lasting 15 months from January 2027. The Commons Library’s Budget summary confirms that this is on top of ordinary corporation tax.
So, an extra contribution, with an end date already attached. Fair enough, but hardly a government grabbing the financial sector by the scruff of the neck.
There’s a different story for savers. The planned cut to the cash ISA allowance was scrapped, keeping it at £20,000, while tax rates on taxable savings income will be 24%, 44% and 49% from April 2027.
TBH, I’m pleased they abandoned the cash ISA cut. People should be able to keep an emergency fund without being nudged towards investments they don’t understand or want. But the combination does make the distinction between money inside and outside the tax shelter more significant. “Supporting savers” needs a bit of qualification.
Final thoughts
The uncomfortable backdrop is the OBR’s forecast of just 1% growth next year, down from 1.6% in March. That’s a forecast, not a certainty, but it hardly suggests an easy route to better living standards.
There are worthwhile decisions here, especially on social housing. I’d like more of that: something which leaves people with a lasting improvement in their circumstances.
For now, I’d take the help with the bills and reserve judgement on the promised transformation. We’ve heard the announcements. Let’s see the houses.