Chancellor of the Exchequer John Healey preparing to deliver the Budget at 11 Downing Street. Photo: Kirsty O'Connor / No 10 Downing Street.
Today, Chancellor of the Exchequer John Healey delivered his first Budget in the House of Commons.
After weeks of speculation on energy bills, the Chancellor announced that he will be extending the VAT cut on energy bills to July 2027.
He will also be launching the Household Energy Payment, which will give £100 to people living in England in homes in council tax bands A to D. Devolved governments in Wales, Scotland and Northern Ireland will receive their share of the funding via the Barnett formula.
Other measures announced today include:
- Mileage rates: making the 55p-per-mile tax-free mileage rate up to 10,000 miles permanent and increasing the tax-free rate over 10,000 work miles from 25p to 35p per mile.
- Fuel duty: extending the 5p fuel duty cut and freeze, and maintaining the Heavy Goods Vehicle (HGV) road tax holiday to July 2027.
- Housing: providing an additional £1.5bn to build homes in England, and new measures to support first time buyers.
Increasing the minimum wage
Building on minimum wage increases announced last year, the Chancellor announced an increase in the National Living Wage for workers aged 21 and over to £13.21 per hour.
While the Chancellor announced minimum wage increases for workers aged 16 to 20, these increases will not close the gap with the National Living Wage.
For people starting their own businesses, he announced a tripling of the Trading Allowance to £3,000 and a new Capital Gains Tax Founders' Relief from April 2027.
Supporting music venues, hospitality businesses and co-operatives
The Chancellor reconfirmed Government's commitment to an extra 20% business rates reduction for pubs, music venues and social clubs. This means relief will be going up from 15% to 35% from April 2027 for all but the largest music venues.
He also announced he would be increasing the threshold for Small Business Rate Relief for retail, hospitality and leisure businesses from £12,000 to £18,000, and freezing rates in real terms for other qualifying businesses in these sectors for the next two years.
At the same time, the Chancellor announced a £10m Regional Co-operative Development Programme to help mayors and strategic authorities support the creation of more co-operative businesses.
He also announced measures to support greater fiscal devolution, giving mayors and strategic authorities access to business rates revenue from 2027 and some income tax revenue by 2028. To help raise further funding, they will also be given new powers together with strategic authorities to introduce an overnight visitor's levy.
Parental rights for self-employed dads
The Chancellor expanded on Tuesday's announcement that this Government would be extending parental pay to more than 150,000 parents a year, including self-employed dads and partners.
The changes, which follow campaigning by the MU, trade unions and Parents and Carers in Performing Arts (PiPA), mean that eligible parents will be entitled to up to two weeks of paternity pay, worth up to £194 per week. Read more on this news from the MU.
Pushing for targeted measures to support music and music education
Responding to the announcement, Musicians’ Union Assistant General Secretary Phil Kear said: “We welcome the Chancellor’s announcement on extending paternity pay to self-employed parents. The MU has long campaigned for improved maternity, paternity and parental rights for working musicians, so it is encouraging that this Government is listening.
“Given the Government’s focus on getting young people into work, we were disappointed not to see a higher increase in the National Minimum Wage for workers aged 16 to 20. Everyone deserves fair pay and conditions regardless of their age and employment status. Our young members already face reduced access to music education and work opportunities, and many rely on second and third jobs to support their music careers. This represents yet another barrier to a career in music."
The Musicians' Union has raised this with Government alongside:
- Extending Orchestral and Theatre Tax Relief to close the gaps that touring costs and large-scale opera and ballet performances fall through.
- Undertaking a review of music education funding to ensure that all children can access sustained instrumental tuition, regardless of ability to pay.
- Increasing arts funding to protect jobs, improve pay and conditions, boost our high streets and support local economies.
- Committing to a universally funded and accessible BBC settlement to protect the UK's music future.
We will be continuing to press Government on all these issues, and we will be consulting with members on the potential impacts of self-assessment income tax reforms.
About the Budget
The Budget is a statement made by the Chancellor of the Exchequer to Parliament outlining the government’s plans for tax and spending. It usually happens once a year in the autumn.
Some of the measures announced will apply on the same day, and others need to be passed by Parliament in the form of “ways and means resolutions” and/or legislation called the Finance Bill.
Learn more in this explainer from the House of Commons Library. The full text of the Autumn Budget is available via HM Treasury.