Labour’s budget gives breathing space for families and businesses, and hope for the future.
That starts with supporting families and businesses with rising energy bills, which have been driven up by wars we did not start. At the same time, we start the big changes needed to put the country on a better course. We are driving good growth in every postcode by giving the people closest to the problems the power to solve them.
We are giving people fresh hope for the future by taking on the big challenges we face, from energy, to housing, to our national security.
We able to take on these challenges because everything we do is built on fiscal discipline, the bedrock for our economy, and we’ll build on it through the 10-Year Plan and the Spending Review.
Labour decisions. Breathing space today, and fresh hope for the future.
Household support
• A £100 Household Energy Payment for eligible Band A–D households in England, paid directly into bank accounts in January.
• £100 million for local authorities to provide further support to households in greatest need.
• The temporary 0% VAT rate on electricity extended until 30 June 2027, reducing the April 2027 Ofgem price cap by around £50.
• Fuel duty rates frozen, and the 5p cut extended to 1 July 2027.
• Making permanent more generous mileage rates for both employees and self-employed people using their own vehicles for work.
Energy bills
• Ofgem will work to abolish gas standing charges, which average around £108 a year per household, and move those costs into unit rates. An estimated 60% of households will save an average of £45 a year. There will be targeted mitigations for some vulnerable households.
Fuel duty
• The 5p fuel duty cut is extended to 1 July 2027, alongside a freeze in rates to that date. The Government estimates that decisions across this Parliament will save motorists £230 compared with previous plans.
High streets and business – our £1bn business rates package
• A business rates package which means that all retail, hospitality and leisure properties in England will see their business rates either frozen in real terms, reduced, or cut to zero.
• A two-year real-terms freeze for all retail, hospitality and leisure properties to cap bill increases at inflation.
• An extra 20 percent business rates cut for pubs and all but the largest live music venues, bringing the average tax cut to over £3,000.
• Around 70,000 additional high street businesses taken out of business rates altogether. That means over half of all retail, hospitality, and leisure businesses will not pay business rates at all.
• Eligible industrial businesses will get around 25% off electricity bills, covering more than 10,000 businesses from April 2027.
• The Budget delivers up to an estimated £640m a year of administrative savings for business.
Housing and first-time buyers
• £4.7bn for Your First Home, which is expected to support around 70,000 first-time buyers own their own home.
• A new First Time Buyer ISA, with a 25% government bonus.
• £1.5bn extra for social and affordable housing, intended to deliver 10,000 additional homes.
• Lifetime ISA withdrawal charge reduced to 20% for first-time buyers purchasing above the £450,000 property cap, so they can retain their own contributions and associated investment growth.
• Planning and regulatory changes designed to reduce the cost and delay involved in building.