Budget 2026 reside: fuel standing costs to be scrapped for thousands and thousands as chancellor prepares to ship funds | Budget 2026
John Healey says scrapping fuel standing costs will save 60% of houses £45 a yr
Good morning. When Andy Burnham grew to become PM, he signalled that he wished to finish 40 years of neoliberalism. Judging by all of the briefing about what shall be within the funds at present, neoliberalism might be protected for an additional yr or so as a result of Burnham and his chancellor, John Healey, have determined to not use this as a second for giant, transformative change, however to as a substitute go for a extra low-risk, every-little-bit-helps fiscal assertion. There are radical parts within the Burnham agenda, however principally they must wait for an additional day. In a video setting the scene for the funds, Healey sums it up with the slogan: “Breathing area at present, and recent hope for the long run.”
Here is Pippa Crerar and Heather Stewart’s in a single day splash story previewing the funds.
And right here is an evaluation by Phillip Inman setting out the primary gadgets we expect.
Every chancellor, although, likes to have at the very least one huge shock for the speech. This is the headline they need for tomorrow’s papers. We don’t know but what Healey has chosen, however there may be a whole lot of hypothesis that it’ll contain vitality payments.
We have already had an announcement from the Treasury at 7am this morning about standing costs being faraway from fuel payments. Julia Kollewe has the story right here.
According to the Treasury, this might save round 60% of households round £45 a yr. It says:
The chancellor will announce at present an finish to this unfair and outdated apply. He will ask Ofgem to ship removing of those costs – that are £108 a yr for the everyday family on common – in 2027 or as quickly as attainable after.
Instead, these mounted prices shall be paid on the unit price, which may save 60% of account-holding households round a mean of £45 off their annual invoice.
While this would possibly sound like a modest price of dwelling measure – nearly an “everyday fix” – Burnham and Healey – maybe delicate to the cost that there’s not a lot radicalism within the funds – are presenting this as the beginning of one thing extra bold. In a press release this morning, Burnham mentioned this exhibits he’s “decided to reform our damaged vitality market” and Healey says:
My funds will draw a line within the sand on an vitality coverage that has failed British billpayers for years, letting further prices on payments pile excessive and leaving households much more uncovered to world shocks.
Healey is talking at 12.30pm. We have additionally acquired PMQs at present, however I’ll principally be specializing in the funds, with response and evaluation, and Graeme Wearden, who writes the Guardian’s enterprise reside weblog, shall be becoming a member of too to offer added firepower.
And we can even have feedback open under the road (BTL).
Here is the agenda for the day.
8.45am: Andy Burnham chairs cupboard, the place John Healey, the chancellor, will temporary ministers on what’s within the funds.
Noon: Burnham faces Kemi Badenoch at PMQs.
12.30pm: Healey delivers the funds.
Around 1.30pm: After Healey finishes, Kemi Badenoch provides a speech responding to the funds. Other MPs reply because the funds debate continues via the afternoon.
2.30pm: Jonathan Haskel, chair of the Office for Budget Responsibility, holds a press convention.
3.30pm: Nigel Farage, the Reform UK chief, and Robert Jenrick, his Treasury spokesperson, maintain a press convention to present their response to the funds.
If you need to get in contact, you may submit a remark BTL and, if it’s addressed to Andrew, I could discover it utilizing a phrase search. But I’m extra prone to see it in the event you electronic mail [email protected].
Key occasions
This is from Alex Chapman from the New Economics Foundation thinktank on the distributional affect of eliminating standing costs on fuel payments.
Chapman says;
My graph would possibly look a little bit totally different to others you see at present. That’s as a result of its from the SERL survey not the LCFS. SERL tracks actual family vitality consumption from good meters. LCFS solely back-calculates it from reported payments.
Bank shares soar on reviews funds financial institution tax shall be ‘momentary and under 8%’
As Graeme Wearden is reporting on the enterprise reside weblog, financial institution shares have gone up in response to a Bloomberg report saying the financial institution tax gained’t be as excessive because the sector inspected.
Graeme says:
Bloomberg are reporting that John Healey’s bank tax rise shall be momentary and are available at lower than 8% – lower than campaigners had hoped.
That would imply that the chancellor isn’t absolutely reversing the lower to the financial institution surcharge launched by Jeremy Hunt in 2023.
Reminder: This surcharge is utilized to financial institution earnings on prime of company tax. Hunt lowered the surcharge from 8% to 3% to compensate for an increase in company tax.
Banks shares are rallying in response. Natwest (+2.4%), Lloyds Banking Group (+2.4%) and Barclays (+2.3%) at the moment are among the many prime risers on the FTSE 100 this morning.
There is extra on the enterprise reside weblog.
Kemi Badenoch has additionally been commenting on a financial institution tax this morning. (See 11.05am.) In a submit on social media, she says that larger taxes for banks will find yourself that means decrease wages for workers, larger costs for patrons, or decrease returns for shareholders.
John Healey is predicted to extend taxes on banks within the funds. The banking sector is already resigned to this happening.
The TUC is firmly in favour of this and it needs to see an extra 3% company tax on the earnings of banking corporations above £100m. It has launched figures at present that it says present the massive banks making £13bn in windfall earnings from charging larger rates of interest.
The TUC says these 4 banks have made earnings price £200bn over the previous 5 years, and that within the first half of 2026 they had been making £1bn per week.
And it says the CEOs of these 4 banks made a mean of £8.9m in 2025 – “182 occasions greater than the common (imply) full-time UK worker”.
Paul Nowak, the TUC basic secretary, mentioned:
The chancellor has rather a lot to weigh up, however banks have seen earnings soar whereas everybody else has struggled. Britain wants a dwelling requirements funds that cuts individuals’s vitality payments– and taxing banks’ windfall earnings is the fairest solution to pay for it.
With eye-watering earnings, bonkers bonuses, and CEOs making extra in two days than most make in a yr, it’s clear that banks can afford to contribute extra. The case is now irrefutable – it’s time to tax the banks to chop payments.
NHS prescription costs shall be frozen at £9.90 within the funds for an additional yr, the Telegraph’s Tony Diver is reporting.
‘My recommendation to John is do not delay’ – Zelenskyy urges UK to hurry up elevating defence spending
Despite some confusing messaging, John Healey isn’t anticipated to set out exact particulars at present of how the UK would possibly increase defence spending to three% of GDP by 2030. This is regardless of the actual fact he resigned as defence secretary when Keir Starmer was PM as a result of Starmer’s defence funding plan didn’t commit to three% by 2030.
In an interview with the Sun, Volodymyr Zelenskyy, the Ukrainian president, urges Healey to go quicker on elevating defence spending. He says:
Can the United Kingdom belief Russia or not? If not, defence must be 100 per cent the precedence.
My recommendation to John is don’t delay. Sorry John … however it’s essential to be direct.
Green chief Zack Polanski says funds may very well be ‘betrayal of future’, after it emerges tax forecasts assume Rosebank going forward
Today Kiran Stacey and Pippa Crerar report that the large Rosebank oilfield might be authorized with out breaching the UK’s emission targets. They additionally reveal that, if the federal government had been to dam Rosebank (which is way extra controversial with environmentalists than the Jackdaw gasfield authorized final week), the Treasury would lose as much as £500m a yr in tax earnings – cash which is already included within the authorities’s fiscal planning assumptions.
There could also be extra on this within the funds paperwork revealed this afternoon.
For the Green chief, Zack Polanski, this is likely one of the most essential revelations of the day. In response, he said:
Today’s funds appears like being worse for our future and the younger than even something Starmer got here up with.
A funds primarily based on approval of mass new oil drilling is a betrayal of our future.
Healey additionally taking a look at eradicating standing costs from electrical energy invoice, Martin Lewis says
Martin Lewis said that, when he met John Healey this morning, the chancellor mentioned that, having eliminated standing costs from fuel payments, he would additionally prefer to eliminate them from electrical energy payments. Lewis mentioned:
The chancellor mentioned he shall be speaking to Ofgem about how they eliminate the cost on electrical energy as properly, however that’s ‘trickier’ apparently and can take longer.
Here are photos of ministers leaving No 10 after cupboard this morning.
None of them are wanting significantly glum.
Investment companies welcome reviews that lower to money Isa allowance to be reversed
The Financial Times is reporting this morning that John Healey will “use his funds to scrap controversial plans to slash the annual money Isa allowance from £20,000 to £12,000, after concluding it was the incorrect solution to persuade individuals to speculate extra in shares and shares”.
Most individuals within the City work on the idea that, if the FT is reporting a funds story on the day it’s being delivered, it’s protected to consider it’s true. Investment corporations have welcomed the information.
Simon Harrington, head of public affairs at PIMFA, a monetary administration firm, mentioned:
We welcome John Healey’s resolution to reverse his predecessor’s controversial plans to slash the annual money ISA allowance from £20,000 to £12,000. We have constantly argued that reducing the allowance was unlikely to realize the federal government’s ambition of encouraging extra individuals to speculate, and risked making the shares and shares ISA – the very wrapper it needs individuals to make use of – much less engaging.
And Will Stevens, a associate at Killik & Co, a wealth administration firm, mentioned:
The resolution to retain the complete Cash ISA allowance is a wise one. Whilst there’s a reputable coverage goal in encouraging extra individuals to speculate for long-term progress, decreasing the allowance risked being perceived as penalising wise saving behaviour slightly than selling investing.
The fuel standing costs resolution has additionally been welcomed by Nesta, a thinktank that just lately revealed a paper arguing for precisely this coverage. Andrew Sissons, director in sustainable future at Nesta, mentioned:
Ditching the fuel standing cost rightly takes an enormous chunk off thousands and thousands of individuals’s vitality payments, sharing prices extra pretty and giving cash-strapped households a much-needed enhance. This measure will present reduction to the poorest households who ration their fuel use however it would additionally imply that switching to electrical heating comparable to warmth pumps is a greater deal for some households that use extra fuel.
The report consists of this chart exhibiting what number of households are prone to lose and acquire from the measure.
Nesta estimates that, primarily based on present TDCV (typical home consumption values), a typical dual-use family will save £27 a yr.
But there was a extra optimistic response from Simon Francis, coordinator of the End Fuel Poverty Coalition. He mentioned:
Removing the fuel standing cost will carry actual reduction to many low-income households who use little or no vitality and for prepayment prospects it may cease debt build up in the summertime months.
It’s additionally welcome that the chancellor acknowledges that wider measures are wanted to carry down payments and we’ll wait to see if he matches these phrases with extra motion within the funds later. Moving levies off electrical energy payments and into basic taxation, as reported, would even be a optimistic step.
Getting rid of standing costs on fuel payments actually ‘sleight of hand’, Tories declare
The Conservatives have dismissed the chancellor’s resolution to eliminate standing costs from vitality payments simply “sleight of hand”. In an interview on GB News, Richard Fuller, the shadow chief secretary to the Treasury, mentioned:
We know there’s an issue with vitality costs coming down the observe. That’s why the Conservatives final yr really introduced that low-cost vitality plan to eliminate VAT on individuals’s vitality payments and roll again a number of the internet zero taxes that burden individuals’s payments.
But what Labour is doing is actually sleight of hand. They’re shifting it from one facet of your vitality invoice or your taxes, and placing it someplace else. Under the Conservatives, in fact, we might make the more durable choices on public spending, so the precise vitality payments and folks’s taxes could be coming down.
Green occasion says ‘business-as-usual funds’ will not ship hope
The Green occasion has put out this response to the information that fuel standing costs shall be abolished. A spokesperson mentioned:
Abolishing standing costs is extra tinkering from a authorities that’s failing to take the daring motion wanted to finish the price of dwelling disaster.
Energy payments have skyrocketed in recent times and are set to rise by a whole lot of kilos once more this winter.
‘Hope’ is a simple factor to vow however is not going to be delivered by a business-as-usual funds.
Money saving skilled Martin Lewis welcomes fuel standing cost abolition, and says additional vitality payments assist probably in funds
John Healey discovered time to carry a gathering with Martin Lewis, the founding father of MoneySavingExpert.com, in Downing Street this morning. Lewis is likely one of the most trusted voices on private finance in Britain, and he has been campaigning for standing costs to be faraway from fuel payments for a while.
Speaking to the media afterwards, Lewis mentioned Healey was in an excellent temper. He mentioned he requested the chancellor if there could be a assist scheme to assist individuals with vitality payments from January, when prices are set to rise sharply. Lewis mentioned Healey wouldn’t affirm something, however he mentioned that “studying between the traces” he gathered that there shall be an announcement on this. Lewis speculated that this may very well be a rise within the heat houses low cost, or it may very well be assist for individuals in decrease council tax bands.
Lewis said:
The largest difficulty in vitality proper now’s that we’re anticipating a 27% rise within the value cap in January. I requested the Chancellor whether or not he shall be intervening on that. He instructed me I’d have to attend for the funds, however studying between the traces, sure, there shall be an announcement at present.
Whether it’s a rise within the Warm Home Discount, or whether or not it’s council tax band, or whether or not it’s completed by way of a payout for individuals in say council tax bands A-D as a proxy for family earnings as Rishi Sunak did who is aware of.
John Healey says scrapping fuel standing costs will save 60% of houses £45 a yr
Good morning. When Andy Burnham grew to become PM, he signalled that he wished to finish 40 years of neoliberalism. Judging by all of the briefing about what shall be within the funds at present, neoliberalism might be protected for an additional yr or so as a result of Burnham and his chancellor, John Healey, have determined to not use this as a second for giant, transformative change, however to as a substitute go for a extra low-risk, every-little-bit-helps fiscal assertion. There are radical parts within the Burnham agenda, however principally they must wait for an additional day. In a video setting the scene for the funds, Healey sums it up with the slogan: “Breathing area at present, and recent hope for the long run.”
Here is Pippa Crerar and Heather Stewart’s in a single day splash story previewing the funds.
And right here is an evaluation by Phillip Inman setting out the primary gadgets we expect.
Every chancellor, although, likes to have at the very least one huge shock for the speech. This is the headline they need for tomorrow’s papers. We don’t know but what Healey has chosen, however there may be a whole lot of hypothesis that it’ll contain vitality payments.
We have already had an announcement from the Treasury at 7am this morning about standing costs being faraway from fuel payments. Julia Kollewe has the story right here.
According to the Treasury, this might save round 60% of households round £45 a yr. It says:
The chancellor will announce at present an finish to this unfair and outdated apply. He will ask Ofgem to ship removing of those costs – that are £108 a yr for the everyday family on common – in 2027 or as quickly as attainable after.
Instead, these mounted prices shall be paid on the unit price, which may save 60% of account-holding households round a mean of £45 off their annual invoice.
While this would possibly sound like a modest price of dwelling measure – nearly an “everyday fix” – Burnham and Healey – maybe delicate to the cost that there’s not a lot radicalism within the funds – are presenting this as the beginning of one thing extra bold. In a press release this morning, Burnham mentioned this exhibits he’s “decided to reform our damaged vitality market” and Healey says:
My funds will draw a line within the sand on an vitality coverage that has failed British billpayers for years, letting further prices on payments pile excessive and leaving households much more uncovered to world shocks.
Healey is talking at 12.30pm. We have additionally acquired PMQs at present, however I’ll principally be specializing in the funds, with response and evaluation, and Graeme Wearden, who writes the Guardian’s enterprise reside weblog, shall be becoming a member of too to offer added firepower.
And we can even have feedback open under the road (BTL).
Here is the agenda for the day.
8.45am: Andy Burnham chairs cupboard, the place John Healey, the chancellor, will temporary ministers on what’s within the funds.
Noon: Burnham faces Kemi Badenoch at PMQs.
12.30pm: Healey delivers the funds.
Around 1.30pm: After Healey finishes, Kemi Badenoch provides a speech responding to the funds. Other MPs reply because the funds debate continues via the afternoon.
2.30pm: Jonathan Haskel, chair of the Office for Budget Responsibility, holds a press convention.
3.30pm: Nigel Farage, the Reform UK chief, and Robert Jenrick, his Treasury spokesperson, maintain a press convention to present their response to the funds.
If you need to get in contact, you may submit a remark BTL and, if it’s addressed to Andrew, I could discover it utilizing a phrase search. But I’m extra prone to see it in the event you electronic mail [email protected].
