Budget 2026: Key points from John Healey’s speech

Chancellor John Healey has set out the government's tax and spending plans in his Budget – the first since Andy Burnham became prime minister.

Here is a summary of the main points.

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One-off £100 payment for up to 20 million households in council tax bands A-D in England to help deal with rising energy bills, with equivalent funding for Scotland, Wales and Northern Ireland

Standing charges – fixed daily fees customers pay regardless of usage – to be removed from household gas bills in England, Scotland and Wales, with costs added to the unit rate instead

VAT cut on electricity bills extended to July

A green levy - the Gas Shipper Obligation to fund hydrogen projects - to be removed from energy bills and put on to general taxation

Freeze on fuel duty extended again to July

Import taxes to be removed on more than 100 food products, including gherkins and marmalade, as well as kerosene and fertilisers

A 55p per mile tax-free mileage rate for those driving up to 10,000 miles for work made permanent, with the rate rising from 25p per mile to 35p above that distance

A new scheme taking 25% off electricity bills for 10,000 energy-intensive businesses to launch in April, with payments backdated for energy costs this year

From April 2027, landlords will face a further 2% in income tax on rental profits

An extra 2% tax on income from savings and property rental from April

Amount people can put into tax-free cash Isas (Individual Savings Accounts) to remain at £20,000 a year, with plans to lower the limit to £12,000 for under-65s scrapped

Surcharge banks pay on their profits to rise from 3% to 6% for 15 months, starting in January

Threshold at which High Street shops start paying business rates in England to be increased from £12,000 to £18,000, meaning businesses would pay no rates on properties with a rateable value below this level

Adult games centres and vape shops will no longer qualify for certain business rates relief

Taxes on gambling machines with stakes over £1 to rise from 20% to 25%

Online marketplaces like Amazon, eBay and Temu to be made responsible for collecting VAT owed by sellers using their platforms

New, flat-rate state pension to rise by £488 a year from April – equivalent to 3.9% - under the triple lock policy, with old basic state pension to rise by £374.40

A new tax-free allowance for low-income pensioners, to ensure those with income up to the value of the full new state pension will not pay income tax

Legal minimum wage to rise by 3.9% in April

Unpaid carers will no longer lose their entire Carer's Allowance if they earn more than £204 a week after tax, with a taper rate introduced instead

Parental pay extended to self-employed fathers and parents in same-sex couples

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A further £432m has been added to the initiative to end rough sleeping by Christmas

New scheme to help first-time buyers in England purchase a home, offering government-backed loans to households earning less than £110,000, or £140,000 inside London

A new First Time Buyer ISA to be introduced from April 2029, to replace the Lifetime ISA and help people save a deposit for their first home

Lifetime ISA holders buying a property above the £450,000 cap will pay a reduced withdrawal charge of 20%, down from 25%

An extra £1bn for social and affordable housing in England, taking total funding for the 10-year programme to more than £40bn

An extra £432m for a programme aimed at giving every rough sleeper in England a route off the streets by Christmas

All business rates to be retained locally by the end of the decade, with mayors to keep 20% of revenue from next year

A share of income tax receipts to go to mayors from 2028

Regional bodies and mayors in England to get greater powers over spending, starting with £285m next year for things like housing, transport and High Streets

Government to work with mayors to design a £1.5bn borrowing facility, enabling investment in larger projects

The chancellor promised an uplift in defence spending by 2030

Defence Investment Plan to be fully funded through a further 1% cut to capital budgets of other government departments, after Sir Keir Starmer only committed £10.3bn for the £15bn plan