Archive photo: The Houses of Parliament and Big Ben beside the River Thames in London. Dawid Tkocz/Pexels (cropped)
Britain announced a £100 energy payment for up to 20 million households in England and a higher tax surcharge on banks Wednesday as Chancellor John Healey unveiled Budget 2026.
The package also extends the temporary cut in fuel duty and raises the National Living Wage to £13.21 an hour from April, according to HM Treasury’s announcement.
Household energy support funded by a bank-tax increase
The government said the £100 Household Energy Payment would be provided in 2027 to eligible households in council tax bands A to D in England. Funding for similar support would be provided to the rest of the United Kingdom.
It will also extend the temporary VAT reduction on household electricity bills until July 1, 2027. Treasury estimated the extension would take about £50 off the annual Ofgem price cap in April 2027.
The Bank Corporation Tax Surcharge will rise from 3% to 6% for 15 months before ending on March 31, 2028, Treasury said. The government estimates the temporary contribution will raise £1.5 billion to help fund support for households and businesses.
Fuel-duty cut extended and minimum wage rises
The temporary 5p-a-liter fuel-duty cut will be extended for another six months, with the planned inflation-linked increase deferred to July 1, 2027.
The National Living Wage will rise 3.9% to £13.21 an hour on April 1, 2027. The government said it would also increase the generosity of tax-free mileage rates for employees and self-employed people who drive for work.
Tariffs will be removed from more than 100 products, including food items, alongside cuts affecting kerosene and fertilizer, Treasury said.
Business support and investment measures
The budget includes a two-year real-terms freeze in business-rates bills for retail, hospitality and leisure properties in England, as well as an increase in the Small Business Rates Relief threshold. Treasury said around 70,000 additional businesses in those sectors would be taken out of business rates.
From April 2027, the British Industrial Competitiveness Scheme is intended to cut electricity bills by up to 25% for more than 10,000 eligible businesses in electricity-intensive sectors and their supply chains.
Treasury also announced a new Founders Relief offering eligible founders of high-growth, innovative businesses a 10% capital-gains tax rate on up to £10 million in lifetime gains.
The National Wealth Fund and British Business Bank will receive an additional £20.4 billion between them. A separate £700 million AI package includes £120 million for the AI Security Institute and £140 million for the Sovereign AI Unit.
JBizNews Desk | London
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