John Healey

At least they are still awake, Madam Deputy Speaker. Last week, my right hon. Friend the Energy Secretary approved the Jackdaw gas field, boosting our energy security. This will protect hundreds of jobs and add an estimated £2.9 billion to the UK economy—a pragmatic, common-sense decision. Alongside that, I launched a new energy wealth fund for the UK. Today, I am setting a new course on energy to get UK energy costs down in line with Europe. From this point, our Labour Government priority is, first and foremost, cheaper energy, with clean power key to achieving it. This is possible because of the progress we have made towards clean power over the last two years, and this Government remain unshakeably committed to net zero by 2050. This will demand deep reform of our energy system, starting at the Budget today and carried through the 10-year plan into the months and years ahead. For many years under Conservative Governments, policy costs were simply loaded on to household bills through levies. Today, I am putting an end to that. We will introduce a new cost control framework to drive down all aspects of energy bills, and I will scrap the upcoming gas shipper obligation—a levy to fund hydrogen projects—and instead back those projects directly from Government. I am making further big changes to bring bills down in the long term. First, on clean power generation, this Government will only buy and build new projects when they lower bills and when they can connect to the grid. Secondly, we will further break the grip of international gas prices on our bills by moving more of our old renewables on to fixed-price contracts. Thirdly, we will build cheaper, faster grid connections through GB Grid, and reform the complex web of institutions that govern the system. This is how we deliver the radical change that Britain needs on energy. It will not happen overnight, so I am taking immediate action to give families and businesses breathing space in the here and now. In the first week of this new Government, we took VAT off electricity for 29 million households. Today, I am extending that VAT cut through the winter and spring to July, taking £50 off the annual price cap. For business, our new British industrial competitiveness scheme will take 25% off electricity bills for 10,000 firms at the heart of British industry. It will go live in April, and I confirm that we will make backdated payments for energy costs this year too. Next year, working with my right hon. Friend the Energy Secretary, we will go further to make bills fairer. Gas standing charges cost people over £100 a year, regardless of how much gas they use, so from next year, through Ofgem, we will remove standing charges from household gas bills. We will set out similar reforms to follow for electricity bills. Let me say this to families at home. I know that, with the conflict in the middle east, rising energy bills are a real worry. I know that people look to the Government at times like this, not to solve all their problems but to give them a bit of breathing space—so today, I am taking one further step. This winter, for 20 million households in council tax bands A to D, I am announcing a £100 energy payment for households. It will be paid directly into people’s bank accounts to deal with rising energy bills. That is a £2.6 billion scheme to take the pressure off in the coldest months and see people through to the spring. The Scottish, Welsh and Northern Ireland Governments will receive their share of this funding, and I call on them to do the same and give people in all nations of the UK breathing space on their energy bills this winter. Madam Deputy Speaker, £50 off VAT, £100 off council tax. For this winter, two tax cuts; for next year, fairer bills; and for the long term, radical reform of the energy market to produce cheaper power. Breathing space now and hope for the future, delivered to the British people by this Labour Government. For millions of people, the cost of living and the cost of doing business are the same—the home is the office, the van is the family car. Earlier this year, the Government extended the 5p cut to fuel duty and slashed red diesel to its lowest rate in over 20 years. With the war in the middle east still driving high fuel prices, I am extending these tax cuts for motorists through the winter and spring to July, supporting households, hauliers and farmers. For anyone who relies on their car for work, from care workers to engineers, I am increasing the higher mileage rate from 25p to 35p per mile, and I am making permanent the increase to the standard mileage rate introduced earlier this year. In this Budget, I am acting on other costs, too. To help with the weekly shop, I am suspending tariffs on over 100 supermarket products to keep prices down. For pensioners, I am delivering the new pension tax allowance, so that pensioners with income of up to the value of the full new state pension will not pay income tax in this Parliament. For ex-mineworkers, I am guaranteeing that every penny of the pension fund surplus now goes to miners. I know the job is not done, and I will go on to ensure the full transfer of the guarantor’s fund. For carers, I am getting rid of the cliff edge on earnings, so that people do not lose their entire carer’s allowance when they earn a penny over the threshold. For 2.3 million of our lowest-paid workers, I am increasing both the national minimum wage and the national living wage by 3.9%. I know that, for families, the worst thing is feeling that their kids are missing out—even on little things—because money is tight. So today I am announcing £15 million for organisations like Dolly Parton’s Imagination Library and BookTrust, which give books to children. I have heard calls for pay transparency on job adverts to close the gender pay gap, and we will act soon to make sure that women are paid and promoted fairly. This Labour Government are determined to make the economy work better for all families, so I have listened to representations from colleagues across the House about paternity leave, and I am making a down payment on change today. As a mark of respect for their role, I will make self-employed fathers and partners eligible for paid parental leave for the first time. Since day one, I have said that I will be a Chancellor who champions the small British firms that give character to our communities: the bakeries, the cafés, the hair salons—they make the places we live and work the places we love. I want these businesses to invest, to recruit and to expand, so today I am taking action to support our high streets. In the first week of this Government, we cut 20% off business rates for pubs, clubs and music venues from April next year. I have heard calls from Members across this House and a call from one Member in particular—my right hon. Friend the Member for Makerfield (Andy Burnham)—so I am increasing the threshold for small business rate relief for retail, hospitality and leisure businesses from £12,000 to £18,000. That means for 70,000 more businesses, I am not just cutting their rates; I am taking them out of paying business rates altogether. That means half of our shops, restaurants and gyms will pay no business rates at all. For all other businesses in these sectors, I will freeze their rates in real terms so that none faces an above-inflation rise for the next two years. To pay for this support for our high streets, I am raising taxes on gambling by increasing machine games duty from 20% to 25% for higher-stakes machines, while protecting pubs and seaside arcades. I will carve out adult gaming centres and vape shops from business rate reliefs and extend the business rates transitional relief supplement for another two years. I will also strengthen the requirements for online marketplaces so that sellers cannot avoid paying VAT when they sell online. For those who feel like celebrating tax cuts for our high streets, I am providing a £10 million alcohol duty relief for around 2,000 small British brewers and British cider makers. Breathing space now, fresh hope for the future—delivered to the British people by this Labour Government. I have made my commitment to fiscal control clear, and every policy in this Budget is fully funded. I have begun by making sure that people pay the tax they owe when they owe it and by closing loopholes in our tax system. First, I am giving His Majesty’s Revenue and Customs funding to improve compliance and stronger powers to collect overdue tax from those who can clearly afford to pay but ignore repeated contact. I am reforming the administration of self-assessed income tax from 2029, bringing more of these taxpayers in line with the majority, so that they make smaller, more regular payments instead of facing large bills that are often harder to pay. Secondly, I am changing outdated rules so that people taking profits out of their companies are taxed consistently, and I will protect the treatment of genuine commercial transactions and families passing their businesses down to the next generation. Thirdly, I am modernising the tax treatment of investment by foreign sovereigns. This will bring UK rules more in line with other investment and other nations, while remaining still one of the most generous regimes in the world. Fourthly, I will resolve the question of VAT for larger taxi companies, ensuring they play by the same rules no matter where they are located, while still protecting smaller local firms. Providing support for British families and businesses has meant raising some tax to meet my commitment to fiscal discipline. I have done this in a balanced way, protecting the incentives for business investment and the incentives and income from work. I am maintaining full expensing in corporation tax for eligible assets. For other assets, I will provide greater up-front relief for new investment, increasing the main rate first-year allowance from 40% to 50%, while reducing the main writing down allowance rate from 14% to 12%. I am reducing the threshold for business asset disposal relief in capital gains tax from £1 million to £500,000, meaning no change for three in four claimants. I am increasing the rates of tax on income from property and savings by a further two percentage points from April 2027, with no change to tax on income from dividends and no change to tax on income from employment. Eighty-eight per cent of people will pay no more tax on their savings, and I am taking a new approach today to encourage people on ordinary incomes to save and to invest. I will not go ahead with the cut to the tax-free amount that people can put into a cash ISA. The limit will stay at £20,000 per year tax-free for people of all ages. To make investment more accessible, I will work with the sector to create a new “starter ISA” to reward first-time investors. Finally, let me turn to banks. Our world-leading banks make a huge contribution to this country—in the tax they pay and in the jobs, industry and investment they support. As Chancellor, I want to say directly to our banks: I celebrate, and am grateful for, the role that you play. Amid the global economic storms, I am looking to our banks to help fund breathing space for British families, so banks will pay an extra 3% on the bank surcharge. This will be time limited to pay for immediate support on energy bills, starting in January and ending 15 months later. I have made my choice at this Budget: asking a bit more of our banks to support ordinary people and raising taxes on gambling to support good growth on every high street. I challenge the Leader of the Opposition. Does she support today our support for British families and British firms, and does she back the action we are taking to pay for it? The only way we keep Britain’s families and Britain’s finances secure for the long term is with an economy that is growing strongly. Our country is one of the most innovative in the world. We have top-ranking universities, vibrant start-ups and deep capital markets. Just today I can announce over £1 billion of new life sciences investment from Kindeva, Vertex and Convatec, backed by almost £70 million of Government funding, and supporting over 1,000 jobs. I can announce that Rolls-Royce will develop its next generation of turbine engine technology here in the UK, in partnership with this Government—a £2.5 billion investment supporting thousands of jobs across the midlands, Bristol and the UK. I want to build on our strengths to unleash the innovation power of Britain to drive competition and raise profits in British business—drawing a line on the costs holding business back with stronger public control, as I have done today on energy; proudly backing Britain’s entrepreneurs to succeed; and unlocking the potential of every part of this country with a new wave of devolution. The biggest barrier to fast-growth firms here in Britain is investment here in Britain. In today’s Budget, I am boosting investment through our public financial institutions, with a further £20.4 billion for the National Wealth Fund and the British Business Bank over the coming years, supporting 140,000 jobs. I will work with pension providers, asset managers and the wider industry to accelerate more private investment into Britain’s innovative, fast-growth firms. We will prevent regulation from holding back investment by removing regulation and tariffs worth £800 million to business. We will legislate for a regulatory carve-out so that innovative products such as drones and medicines can be safely tested and rapidly scaled. I am re-establishing the Better Regulation Executive to cut outdated regulations and admin burdens on businesses and workers—scrapped by the Tories; re-established by this Labour Government. I am determined that we use public procurement to back British businesses, buy British goods and promote British exports, so I am expanding challenge-led procurement, just as I did in Defence, so that the Government can be the first customer for innovative firms. I am developing a new definition of UK supplier, to identify companies that are creating genuine wealth, genuine investment and jobs here in Britain. [Interruption.]