Households in council tax bands A-D will receive a £100 'household energy payment' this winter, directly deposited into bank accounts to help with rising energy bills. The current 5p reduction in fuel duty is set to continue until July 2027, and the VAT cut to zero for electricity bills has also been extended to the same date. Furthermore, standing charges will be removed from gas bills next year.
Other announcements include a 3.9 per cent increase to the National Minimum Wage. A tapered reduction to the Carers Allowance is planned from 2030 for carers earning over the current threshold. The tax-free cash ISA allowance will remain at £20,000. Business rates relief thresholds for small retail, hospitality, and leisure businesses will increase from £12,000 to £18,000.
Cllr Mike Bell, the Leader of North Somerset Council, commented on the budget news, stating, “I welcome the measures announced by the Chancellor to help people deal with the ongoing cost of living crisis, particularly the winter energy payment. We know many residents and businesses are struggling and every little helps to ease the burden and encourage growth into the economy. I particularly welcome additional business rates relief for smaller businesses, the lifeblood of the North Somerset economy and key to thriving town and village high streets.”
The announcement also detailed plans for greater devolution of funding and decision-making from central government to regions through Strategic Combined Authorities. These plans include regional mayors retaining 20 per cent of business rates revenue from 2027, rising to 100 per cent retention by the end of the decade. Additionally, £285m 'Good Growth' funding will be distributed nationally, with some income tax revenue to be retained in the regions from 2028.
North Somerset Council is awaiting Parliamentary instruments to join the West of England Combined Authority, which Cllr Bell believes is crucial. “Our membership of the combined authority comes at a crucial time as plans unfold for more decision-making and spending plans to be made at the regional level and not in Whitehall. Membership cannot come soon enough so that North Somerset can influence and benefit from the wider economic powers the government wants to give to regions. Decisions should be made by the people who understand their local communities best. As always, the devil will be in the detail, but the signs are very promising,” he added.
However, the budget contained no new announcements regarding local government funding pressures or the crisis in social care services. Cllr Bell concluded, “Leaving councils unaided in meeting rising social care costs risks more people waiting for essential support, cuts to services that prevent crises and greater demands on local council taxes. The Prime Minister says he wants to create a properly funded National Care Service, but people who need support today cannot wait until the next Parliament for action.”
