The tax rises Healey didn’t tell you about

In John Healey’s Budget he promised to make Britain “more resilient” to global shocks and pledged to give families a £100m payment to help with energy costs, and offer a tax break for low income pensioners.

But the Office for Budget Responsibility (OBR) has warned living standards will be challenged by higher energy costs and a ballooning tax burden. Here are all the hidden tax rises in Wednesday’s Budget.

The Chancellor announced a series of pledges to curb rising energy costs, promising the beginning of “radical reform”.

This includes a £100 payment towards energy costs for up to 20 million households in council tax bands A to D.

However, these fixed daily charges on gas bills will be shifted onto the price consumers pay for each unit of energy.

Energy bills

The Treasury has claimed that 60 per cent of households will save an average of £45 a year.

But the savings will only come after the big projected rise to energy bills in January. While lower users will gain the most, higher users – which includes large, low-income families – are likely to pay more than they currently do.

• Millions face being dragged into paying more income tax after the thresholds remained frozen.
• The IFS warned it was a Budget with “very little that will move the dial on growth”.

The effect, known as fiscal drag, occurs when tax thresholds remain frozen while wages rise – meaning people pay more tax as a greater proportion of their income becomes taxable or they are pushed into higher tax bands.

Middle-income pensioners 

• Pensioners with income less than the full amount of the new state pension will not have to pay income tax, Healey announced.
• However, middle and higher income pensioners face a squeeze due to related tax rules.
• Healey said that to avoid a “cliff edge” once a pension income exceeds the allowance, the Government would “gradually” reduce the allowance as income increases.

Middle-income pensioners 

• The Government said this means those earning between £13,037 and £13,319 will receive “some Pension Tax Allowance and pay less income tax than you otherwise would”.
• But Sir Steve Webb, former pensions minister, said this means around 200,000 low-income pensioners will face a marginal income tax rate of 53 per cent.
• For each extra pound above the cut-off, they pay 20p in income tax and lose 33p in the tax rebate that those on lower incomes get, he said.

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Higher housing costs 

The Chancellor announced that the surcharge on bank profits would be temporarily doubled from 3 to 6 per cent and that landlords face a 4 per cent tax on rental profits and property income.

But critics are warning higher costs will be passed onto renters and onto people securing mortgages.

John  denies postponing difficult welfare system decisions

John Healey has denied postponing difficult decisions on the welfare system, insisting the Government is making changes “now”.

The Chancellor’s Budget has faced criticism for not dealing with the ballooning cost of welfare, including from Kemi Badenoch, who said the country is “drowning in an out-of-control welfare system”.

• The influential Institute for Fiscal Studies think-tank warned the Budget delayed tough decisions.
• Speaking to , Healey said ministers have already brought in a range of measures to cut the cost.
• The Chancellor told BBC Radio 4’s that the Government “can never remove completely the cost of living pressures that people feel”.

Two years ago we started putting back in place face-to-face assessments. We’ve changed terms of universal credit, so people don’t have to brand themselves as too sick to work. So, those are changes we’re making now. But in the long run, as I’ve argued, and the Prime Minister has said, too, we have to bring the cost of  down.

healey told gb news

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How much benefit payments will rise by

Benefit claimants will see their payments boosted next year in a move that could cost the Government up to £5.5bn, according to the Institute for Fiscal Studies (IFS).

Some 10 million Britons claiming working-age benefits are set to see a rise of at least 3.5 per cent from next spring, with ministers expected to increase rates in line with inflation.

What to know as ‘error’ blamed for Spain train crash

At least 68 people died and dozens more were injured following a “rear-end collision” between two trains in central Spain.

What happened?

The crash occurred between the towns of Los Yébenes and Urda, in the Toledo province, shortly before 9am local time (8am UK time) on Wednesday.

• A train operated by the state-owned national rail company Renfe carrying 397 passengers, rammed into the back of a stationary train operated by private firm Iryo, carrying 147 people.
• The crash caused at least two carriages to fall down an embankment.
• Former Spanish government minister, Fátima Báñez, was among those killed in the incident, local authorities confirmed.
• Three days of national mourning have now been declared to honour the victims.

Spain’s Transport minister Óscar Puente said a computer failure led to the initial halt of six moving trains.

Puente also suggested that the accident may have been caused by human error because one of the trains had been told to resume its journey. He said it was the control centre, through its operators, that made the decision to resume traffic which he said was “inexplicable”.

The story in pictures

What has Spain’s PM said?

The whole of Spain is grieving. Lives have been shattered, families have been torn apart, the pain is immense.

Pedro Sanchez

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Why train crashes are more common in Spain

Earlier this year, a collision between two high-speed trains in southern Spain killed 39 people. But what does the data on Spain’s train crashes say, and which are the safest European railways?

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Hayden Panettiere’s death ruled accidental

Police have closed the investigation into Hayden Panettiere’s death after a post-mortem found .

The actress died in August after being found unresponsive in an apartment in the South Carolina city of Greenville.

No signs of foul play

Panettiere’s on-and-off boyfriend Brian Hickerson and his brother Zach were in the property at the time. Paramedics performed CPR and other resuscitation efforts for 40 minutes before declaring her dead.

Officers initially said there did not appear to be any signs of foul play – an assessment backed up by last month’s post-mortem.

The coroner ruled Panettiere died from the toxic effects of an accidental overdose of several drugs, including the synthetic opioid fentanyl.

The other drugs found in her system were anti-anxiety medicine alprazolam, muscle relaxer methocarbamol, and quetiapine – which can be used to treat depression.

Panettiere had been in rehab a few weeks before death.

The four snowballing crises Putin refuses
to acknowledge

Vladimir Putin believes victory over Ukraine is inevitable as his missiles pound the country with near impunity and US policy turns in his favour.

Yet Moscow is also showing signs of strain deep into the fifth year of war, with the Russian leader facing mounting problems at home and on the battlefield.

Russian forces have made effectively
zero progress on a series of failed offensives this year, according to the latest analysis by the Institute for the Study of War (ISW) in Washington, DC. 

While Russian officials claimed that they had seized 6,500 square kilometres since the start of the year, the ISW put this at closer to 73 square kilometres, and since September the Russians had lost 240 square kilometres.

2. The manpower problem

Russia’s poor battlefield situation has come at the cost of around 40,000 casualties per month, the heaviest losses of the war, according to estimates.

Even as Russia escalates attacks on Ukraine’s energy grid for a fifth winter,
its own fuel sector is buckling under a relentless campaign of Ukrainian drone strikes. 

• Every oil refinery in western Russia has been hit during this campaign, taking out between one-third to half of the country’s refining capacity by different estimates. Only five refineries remain untouched, according to the International Energy Agency. 

4. Economic decline

New budget proposals sent to Russia’s parliament this month show an ongoing transition to a war economy at the population’s expense.

Spending on defence is projected to grow to 7 per cent of Russian GDP, while ordinary Russians and small businesses face interest rates of 14 per cent and inflation that is approaching 8 per cent – pushing up prices for petrol and household goods.

Putin still believes victory is close

Despite the political and economic 
pressures the Kremlin is facing, Putin thinks victory is close and is promising Russians the end is in sight, said Anna Matveeva of the Russia Institute at King’s College London.

“Putin is signalling to Russians that Ukraine is not going to hold on for very long, that the military campaign has been making good progress and that society just needs to hold on for a few more months,” Matveeva said.

Sale of nicotine products to under-18s banned in Scotland

Under-18s will be banned from purchasing all nicotine and herbal smoking products in Scotland under tougher laws being introduced to protect children and young people from smoking.

What will change?

• It will be illegal for under-18s to purchase pouches, strips and pearls, and any herbal products that can be smoked.
• Anyone selling nicotine products will have to hold a valid registration, so authorities know where products are being sold.
• Vending machines can no longer stock such items.
• Substantial discounts on nicotine products will also
  be banned.

“By banning the sale of these products to under-18s, the Scottish Government is taking a crucial step in protecting people’s health,” said public health minister Maree Todd.

“This in turn is helping people across Scotland to live longer, healthier lives.”

Scotland’s chief medical officer Gregor Smith said the changes “will help reduce
the health harms associated with nicotine 
addiction and address health inequalities”.

How much could scrapping gas standing charges save you?

Chancellor John Healey has announced that standing charges on gas bills will be scrapped from next year as part of his Budget.

The announcement is part of the Government’s “cost control framework” to drive down energy bills.

What are gas standing charges?

Gas standing charges are a fixed daily fee you pay for being connected to the gas network.

You are charges this regardless of how much gas you actually use – even if you go weeks without using any at all.

Under the current energy price cap, the average gas standing charge is 29.68p a day for households paying by Direct Debit, or £108 a year.

What’s the catch?

• It’s important to note that scrapping the standing charge does not mean scrapping the costs it currently pays for – so the price will need to be reflected in bills elsewhere.
• Those costs will instead be moved onto the price you pay for each unit of gas.
• This means some households may see lower energy bills, while others may not notice and others may see an increase

• Only six in ten households will see the £45 drop, according to the Government.
• But whether you see a drop depends on how much gas you use, as standing charges will instead be incorporated into normal gas prices.
• Essentially, the less gas you use, the more likely you are to benefit.
• If you use more gas than most, you could see your bill increase.

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What the Budget means for your money

Chancellor John Healey has delivered his long-awaited first Budget, with a raft of changes announced. The measures include a U-turn on a planned cut to cash ISA allowances, £100 in energy support for some households, and extra taxes on banks.

A quick guide to this year’s Budget

This is a Budget for the working people.

Chancellor John Healey unveiled the long-anticipated Budget yesterday, the first for Prime Minister Andy Burnham. Healey called it a Budget “for the working people” as he announced details.

So what are the key takeaways?

Cheaper energy

• This winter, 20 million households in council tax bands A to D will receive a £100 energy payment paid directly into people’s bank accounts – a £2.6bn scheme.
• Gas standing charges will be removed from next year, and similar reforms will follow for electricity.
• The Chancellor says he will remove some levies on energy bills.
• He also extended a VAT cut on electricity to July 2027, cutting £50 off the annual price cap.

• The tax-free limit on cash ISAs will stay at £20,000, abandoning plans to reduce it to £12,000.
• “To make the investment more accessible, I will work with the sector to create a new starter ISA to reward first-time investors,” Healey said.

A new pension tax allowance will be introduced. “Pensioners with income up to the value of the full new state pension will not pay income tax in this parliament,” Healey said.

• A benefits rule that punished unpaid carers for earning too much is being abolished. Now, if they earn any amount above the threshold set by means-testing (£204 a week), they lose the whole carer’s allowance.
• This will be replaced, Healey announced.
• Self-employed dads and same-sex partners will also be eligible for two weeks’ support worth up to £194 a week.

3.9%

The Chancellor announced a rise in the minimum wage by nearly 3.9 per cent, the same rate for workers aged 18 to 20 years old and those aged 21 and over.

The Chancellor promises to reform non-compete clauses in contracts.

• Healey also said he will extend the fuel duty cut until July 2027.
• Workers using their car to get to work can be reimbursed a greater amount by their employers tax-free – the higher mileage rate will increase from 25p to 35p per mile.

The threshold for small business rate relief will increase from £12,000 to £18,000 for retail, hospitality and leisure.

Healey will also raise taxes on the gambling industry to pay for the changes. A £10m alcohol duty relief will be provided for around 2,000 small British brewers and cider makers.