Chancellor John Healey has raised taxes on banks and landlords to pay for a £100 winter handout for 20 million families, as official forecasts made clear that the cost of living crisis shows no sign of ending. In his first Budget, Healey blamed “global economic storms” for the bleak outlook, pointing to the war in Iran, which has pushed up oil and gas prices.
The speech was low-key and contained few surprises, with many of the measures trailed in advance. The tax increases fall on the banking sector and on landlords, and the revenue raised is directed to households facing higher energy costs over the winter months. The payment is intended to ease pressure on families as they head into the colder period, when heating bills typically rise. The Budget was presented as a response to forces outside the government’s control, with Healey arguing that ministers were acting to shield households and firms from a global downturn rather than from any domestic policy failure.
Banks and gambling firms were also hit with higher taxes. The additional revenue is earmarked for two purposes: support for high street businesses and help with household energy bills. Taken together, the measures show the government steering money from sectors it regards as able to pay towards households and businesses under immediate financial strain.
The Budget leaned heavily on forecasts from the Office for Budget Responsibility, the independent body that assesses the government’s fiscal plans. Those projections offered little comfort on prices. Energy costs are expected to remain elevated while the conflict in the Middle East continues to disrupt global markets, and the tax burden across the economy is set to rise. Taken together with the energy outlook, that prospect leaves households with limited room to absorb further increases in living costs.
Landlords face a tax rise, and critics have argued that such increases can be passed on to tenants through higher rents. The Budget documents presented the measures as aimed at those best placed to pay. Savers and workers, meanwhile, have been described by some commentators as bearing a heavier share of the burden, a claim the government has not accepted, though the tax-burden projections underline why the question has become central to the debate.
Opposition figures and commentators have been weighing the balance of the package. Some have welcomed direct support for households, while others have questioned whether a single £100 payment is enough to offset rising bills over the coming months. The payment reaches around 20 million households, making it one of the largest direct support measures announced in the Budget. Its real effect will depend on how far energy prices move in the months ahead, and on whether the banking and landlord taxes raise the sums expected.