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Budget 2026: Key Announcements
Chancellor John Healey's Speech Summary
By Becky Morton, Political Reporter
Published 28 September 2026, Updated 4 minutes ago
Chancellor John Healey is outlining the government's tax and spending plans in his Budget, the first under Prime Minister Andy Burnham. Here's a breakdown:
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Energy Bill Support: A £100 payment to 20 million households in England in council tax bands A-D to help with rising energy costs. Equivalent funding is allocated for Scotland, Wales, and Northern Ireland.
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Gas Bill Changes: Removal of standing charges from household gas bills, with costs incorporated into the unit rate.
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VAT on Electricity Bills: The VAT cut on electricity bills is extended from April to July.
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Fuel Duty Freeze: The freeze on fuel duty is extended to July.
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Import Taxes Relief: Removal of import taxes on over 100 food products, including gherkins, marmalade, kerosene, and fertilisers.
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Mileage Rate for Drivers: A permanent 55p per mile tax-free mileage rate for up to 10,000 miles, with a rate increase to 35p per mile above that distance.
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Low-Income Pensioner Allowance: A new tax-free allowance for low-income pensioners, ensuring those with income up to the new State Pension value do not pay income tax.
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Minimum Wage Rise: The legal minimum wage for workers increases by 3.9%.
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Carer's Allowance: Unpaid carers will no longer lose their entire Carer's Allowance if earning more than £204 a week after tax, with a taper rate introduced.
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Parental Pay: Parental pay extended to self-employed fathers and parents in same-sex couples.
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Bank Surcharge: Surcharge on bank profits to rise from 3% to 6% for 15 months, starting in January.
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Business Rates: Threshold for High Street shops paying business rates in England increased from £12,000 to £18,000.
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Social Housing Funding: An extra £1 billion for social and affordable housing in England, bringing the 10-year program total to over £40 billion.
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Rough Sleepers Initiative: £432 million for a program to end rough sleeping by Christmas.
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Regional Spending Powers: Regional bodies and mayors in England to gain greater spending powers, with £285 million allocated for 2022.
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Borrowing Facility: A £1.5 billion borrowing facility to be designed in collaboration with mayors for larger projects.
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AI Investment: Over £600 million in AI-related projects, including £120 million for the UK's AI Security Institute and £100 million for a national AI Biosecurity Lab.
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Misogyny Fund: A £15 million fund to tackle misogyny in schools, at work, and in communities.