John Healey will scrap standing charges on gas bills for millions of Britons in the Budget this afternoon, the government has announced.
The Chancellor had promised to get ‘energy costs down for good’ and provide ‘breathing space’ for hard-pressed families.
Standing charges, which cover the cost of delivery to homes and businesses, are the feature of energy bills people complain about most, according to energy companies.
They will be scrapped from next year ‘or as soon as possible after’, the Treasury said this morning.
Instead, fixed costs will be paid on the unit rate, with the government estimating that 60 per cent of UK households will save an average of £45 per year.
Mr Healey will deliver his Budget statement to the House of Commons at around 12.30pm, amid mounting pressure to ease the cost-of-living crisis, boost Britain’s struggling economy and plug a multibillion-pound hole in the public finances.
The Chancellor is expected to announce further measures targeting fuel duty and businesses, while speculation mounts over a potential tax raid on banks.
Follow the Daily Mail’s live coverage below.
What could be in the Chancellor’s red box on Budget Day?
Chancellor set to u-turn on ISA allowance cut
Mr Healey is reportedly planning to reverse the decision to slash the annual ISA allowance from £20,000 to £12,000.
He is said to believe the allowance cut was the wrong tool to persuade Britons to invest more in stocks and shares and would rather look to educate savers on the benefits of equity investing, according to the Financial Times.
Isas, or individual savings accounts, are exempt from tax on interest, as well as capital gains and income taxes.
READ MORE: Here’s where I fear Labour could strike in the Budget: JEFF PRESTRIDGE on how to protect your savings, pensions and wealth
Greens: Scrapping standing charges is mere ‘tinkering’
The Greens have accused Labour of ‘tinkering’, rather than taking bold decisions, after the accouncement standing charges would be scrapped.
A spokesperson said this morning:
Abolishing standing charges is more tinkering from a Government that is failing to take the bold action needed to end the cost-of-living crisis.
Energy bills have skyrocketed in recent years and are set to rise by hundreds of pounds again this winter.
“Hope” is an easy thing to promise but will not be delivered by a business-as-usual Budget.
Martin Lewis posts from inside Number 11
What can we expect to hear on defence spending?
Andy Burnham said on Monday that John Healey would set out a plan to fully fund the government’s existing defence commitments alongside a pathway to hitting a 2035 NATO spending pledge.
Burnham admitted the first challenge his government had to meet was to fully fund the already announced defence investment plan.
Asked if the pathway set out on Wednesday would include a commitment to lift spending to 3 percent of GDP on defence by 2030 and 3.5 percent by 2035, he said:
It is, and we will set out a plan as to how we think is the right way to do that. We will meet our NATO commitments.
Britain currently spends around 2.6 percent of its GDP on defence.
Healey to launch a raid on banks
Most of the revenue raised in the budget is expected to come from a raid on banks.
How will he do this?
The Chancellor is set to increase tax on banking profits by either:
Increasing the surcharge banks pay on corporation tax – after it was cut by Jeremy Hunt from 8 per cent to 3 per cent. Reversing the cut would raise around £2billion.
Or Healey could also raise the bank levy – a small percentage charged on loans.
Martin Lewis emerges from Chancellor’s residence
Consumer finance expert Martin Lewis emerged from Number 11 Downing Street early this morning.
He told BBC Radio 4’s Today programme that Mr Healey had pledged to work on addressing standing charges on electricity bills over the next year.
He said:
They are a moral hazard. They are a disincentive for users to cut their bills. So many people get in touch with me saying ‘over half my bill is standing charges, there’s nothing I can do about it’. They are a poll tax on energy.
What will not be in the Budget?
The Chancellor is expected to avoid:
Increasing capital gains tax or lowering the threshold for the ‘mansion tax’
How he plans to bring down Britain’s ballooning benefits bill
Since becoming PM, Mr Burnham has insisted he will ‘bring the welfare budget down’, but ruled out ‘crude’ cuts to benefits in doing so.
He is said to have delayed a major report on youth inactivity until next month in order to prevent it overshadowing the Budget.
Breaking:Standing charges to be scrapped from household gas bills
The Chancellor will remove standing charges from household gas bills for tens of millions of people, the government has announced.
Standing charges cover the cost of delivery to homes and businesses, but will be scrapped from next year ‘or as soon as possible after’, the Treasury said.
Instead, fixed costs will be paid on the unit rate, with the government estimating that 60 per cent of households will save an average of £45 per year.
Standing charges are fixed daily fees applied separately to gas and electricity bills, which customers pay regardless of usage.
Healey quit the government over defence spending – will he now follow through?
John Healey dramatically quit as Keir Starmer’s Defence Secretary on June 11 – and the PM resigned 11 days later.
He complained that Starmer was refusing to make the necessary commitments to increases in defence spending.
Mr Healey wrote in his resignation letter: ‘As we have regularly discussed, I am certain that a headmark date for 3% of GDP on defence in 2030 is what Britain must set.’
So, now with his hands on the levers, will the Chancellor follow through on his assertion? It seems not.
Mr Healey is expected to outline modest increases to defence spending, including filling a £5billion hole in the Defence Investment Plan by cutting Net Zero and road projects.
But he is not expected to commit to raising defence spending to three per cent of GDP by 2030.
Chancellor to duck much-needed welfare reforms – and increase handouts by £6m
By Jason Groves, Political Editor
The Chancellor will swerve welfare reform in today’s Budget – as he hands out billions of pounds more to benefit claimants.
John Healey will not curb runaway welfare spending despite growing pressure on the public finances.
Instead, he is expected to increase the tax burden to the highest level on record to help boost handouts.
Mr Healey has set aside £5.5billion to support a 3.5 per cent increase to benefits paid to ten million people, Labour sources told the Daily Mail.
He is also expected to earmark at least another £1billion to subsidise the fuel bills of those on benefits and low incomes this winter.
Read the rest of our Political Editor’s report ahead of the Budget:
