Energy bills take the strain

Chancellor John Healey has delivered Budget 2026, a package built around what HM Treasury calls ‘breathing space’ for families and businesses, matched with structural changes for the decade ahead. The statement pairs immediate relief on energy bills, business rates, fuel duty and wages with longer-term reforms to the energy system, housing supply and support for high-growth companies. For the organisations that Britain’s executives run, several of the most uncertain cost lines can now be budgeted with confidence.

Households in council tax bands A to D in England will receive a £100 Household Energy Payment from January 2027, a £2.6 billion scheme reaching up to 20 million homes. The temporary VAT cut on electricity bills has been extended into next year, which the Treasury expects to take around £50 off the Ofgem annual price cap from April 2027. Ofgem will also be asked to abolish gas standing charges and move those costs into unit rates, giving consumers more control over what they pay.

For employers, the most consequential measure may be the British Industrial Competitiveness Scheme, which will give 10,000 energy intensive manufacturing firms a discount of 20% to 25% on electricity costs from April 2027, including a back payment for the current financial year. Finance directors can now cost 2027 budgets against a known discount rather than a volatile forecast. Boards weighing investment in electrification have a firmer base for their sums.

Business rates come down for the high street

Retail, hospitality and leisure properties in England will see their business rates either frozen in real terms, reduced, or cut to zero. Raising the Small Business Rates Relief threshold takes around 70,000 more businesses out of rates altogether, and the Treasury calculates that half of all retail, hospitality and leisure properties will pay nothing. A two-year real-terms freeze follows for the rest, on top of the extra 20% cut for pubs and smaller live music venues confirmed earlier in the year.

The package is funded by tightening compliance among online marketplaces, raising gambling tax on higher-risk machine games and extending a 1p supplement on bills that have already seen reductions. For chains and independents alike, property budgets are now markedly easier to set. Owners weighing expansion into vacant high street units have one fewer variable to price.

Wages, motoring and household demand

The National Living Wage will rise by 3.9% to £13.21 an hour from April 2027, adding £910 a year to the gross earnings of a full-time worker. Retail and hospitality operators gain a settled basis for payroll planning rather than a mid-year surprise. Parental pay reaches more than 160,000 additional parents, with self-employed fathers and partners covered for the first time, a change with practical weight for firms that contract freelancers.

Drivers keep the 5p cut to fuel duty for a further six months, with the planned RPI increase deferred as well, and tax-free mileage rates rise permanently for around three million people who use their own vehicle for work. Public charging costs come down for electric vehicle drivers, saving them around £150 a year on average. For consumer-facing businesses, these measures amount to demand support that does not wait for growth to arrive.

Founder’s Relief, housing and the fiscal anchor

Founders and early investors in high-growth companies gain a reduced 10% rate of Capital Gains Tax on lifetime gains of up to £10 million from April 2027, a measure the Treasury hopes will persuade more scale-up companies and their shareholders to stay in Britain. It anchors a wider enterprise agenda that promises better access to talent, customers and growth capital for innovative firms.

Housing takes a further £1.5 billion for social and affordable homes, lifting planned capital investment above £40 billion over the next decade, while the Your First Home Scheme aims to help 70,000 people onto the property ladder and a new First Time Buyer ISA simplifies deposit saving. Borrowing falls to 1.8% of GDP by 2031-32, and the International Monetary Fund expects the UK to hold the lowest level of borrowing in the G7 from 2029. For executives, the message from Budget 2026 is one of stability: a Chancellor cutting borrowing while spreading relief across wages, rates and energy bills has given business leaders a planning horizon worth using.