Millions of households across the country will receive a one-off payment to help with surging energy prices next year, the Chancellor announced.
But the use of “outdated” council tax bands to determine who will receive a £100 energy support payment has drawn criticism from analysts as the barometer for eligibility is based on property valuations from 1991.
John Healey made several pledges to help households deal with rising energy bills in his Budget announcement on Wednesday, but the rabbit out of the hat moment was a one-off cash payment for households to help deal with rising energy prices.
In tandem with scrapping standing charges on gas bills, the Chancellor said the measure would provide “breathing room” for households despite forecasts warning typical bills will rise 27 per cent to £2,200 next year.
All households in council tax bands A to D, which equates to around 20 million households – roughly 70 per cent of all resident properties – will receive the money, which will be paid directly into bank accounts.
How all over 16s could need ID to use social media
Ofcom has set out its recommendations for the most effective ways to identify which of the UK’s millions of social media users are aged over 16.
What you need to know
Under the UK’s social media ban – which comes into force in March next year – under 16s will be prevented from accessing 10 of the biggest platforms, including Instagram and TikTok.
Many adults are also likely to have to confirm that they are not under-age by using one of the proposed measures,
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Ofcom’s recommendation
Age verification below 18 is difficult, because 16 and 17 year olds don’t have credit cards or full driving licences, and may not have passports.
To address that challenge, Ofcom has recommended four methods that it says would be “highly effective” at gauging people’s ages, in addition to traditional forms of ID.
The four methods
- Photo ID matching, where relevant information on a photo ID is checked against a live image.
- Banking-based checks – using the information on record regarding a user’s age.
- Face age estimation technology, which Ofcom argues has recently improved.
- Digital ID services, which enable people to digitally prove who they are or provide information about themselves, such as their age.
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Why Toblerone owner is suing vegan chocolate brand
The owner of Toblerone is taking legal action against a small British vegan chocolate brand which it claims has been copying the Swiss chocolate bar’s iconic shape.
What you need to know
- Mondelēz has filed papers at the high court accusing Catherine’s Original’s of “passing off” and trademark infringement with its O’bar.
- The O’bar is a length of chocolate divided into segments each with a rounded semi-oval hump.
Catherine’s Originals, founded by Catherine Dodd in 2021, makes its chocolate in Sussex and sells them via markets and online.
- Mondelēz International said: “The iconic Toblerone shape is one of the most recognised and distinctive product designs in the UK and across the world, and has been a hallmark of the brand since 1929.
- “We have a responsibility to protect our trademarks and intellectual property, which we take seriously.”
- The legal battle comes after Poundland was forced to delay the launch of its Twin Peaks bar in 2017 after a legal warning from Mondelēz.
What O’bar founder has said
We stand firmly behind the product and identity we’ve created. We strongly disagree with the claim concerning O’bar and are working with our legal team to defend our position. Honestly, it’s fairly frightening for a small business we’ve put so much care and hard work into building.
catherine dodd
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.
Energy bills
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.
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High tax bands for millions
- 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.
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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”.
What you need to know
- 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.
What caused the crash?
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.
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Cause of death revealed
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.
But the measure has been criticised by fuel poverty campaigners and economists who warn the support is not targeted to those who need it most, and that it does not go far enough to help the most vulnerable.
“Many who receive it won’t need it, while the most vulnerable are struggling in unheated, damp homes. The Government could have targeted those in greatest need,” National Energy Action’s chief executive Adam Scorer said.
Greg Thwaites, the Resolution Foundation’s interim chief economist, described the scheme as a “terribly badly targeted kind of support”.
“And the reason for that is, first, there are lots of people who are doing OK who probably can manage without that money, and probably need to manage without that money if we’re going to support the people we need to support at a time when we don’t have a lot of money to throw around in the first place,” he added.
“We would much rather the Government gave twice as much money to half as many people.”
Annual energy bills for a typical household increased to £1,723 this autumn, but with the price cap set to rise again in January, campaigners say the one-off winter energy payment will cover the rise.
The median gross annual pay in London is £42,280, based on Office for National Statistics data, but the country’s wealthiest areas are concentrated in individual boroughs, such as Westminster, where the median annual gross pay is estimated at £57,609.
It is expected that around 46,500 homes in the capital will be eligible for the £100 payment, according to analysis of Valuation Office Agency data by money app, Gains.
Outside of the capital, Brentwood comes out on top as the area with the highest average wages that will benefit from the £2.6bn scheme.
The median gross annual pay in Brentwood is £51,739, while homes in bands A to D make up 55.3 per cent of the properties charged council tax in the area – most being in A to C.
In second place after the Essex town is St Albans, where the median gross annual pay is £48,392. It has one of the lowest shares of homes in bands A to D with 49 per cent, but 31,210 homes will receive the cash, the data show.
Elmbridge in Surrey, which ranks third for median gross annual pay (£45,951), also has some of the fewest homes in A to D bands (41.1 per cent), with 24,880 homes in the bands eligible for the energy payment.
Around 60 per cent of homes in Runnymede, where average wages are £44,427, are in bands A to D.
In affluent North Hertfordshire, where annual median wages are £43,011, 72.5 per cent of homes will meet the criteria for the cash.
More than half of households (52.5 per cent) in Wokingham, another high-income area, will qualify for the payment where the average annual salary is £44,111.
Median annual wages are lowest in Nottingham (£27,496), where 143,660 households will be entitled to the cash to help with energy bills, followed by the Isle of Wight £27,818, where 83.1 per cent of households will qualify, and Malvern Hills (£28,140), which has 68.6 per cent of homes in bands A to D.
In Blackpool, one of the most deprived areas in England, gross annual pay is estimated to be £29,003.
The majority of homes in the area are in bands A to D (96.1 per cent), but many on lower incomes could miss out on the £100 payment because they fall outside of the eligible bands.
Chris Barnes, co-founder of Gains App, said: “Whether you get the £100 mostly comes down to what your home was worth 35 years ago, not what you earn or what you pay for energy.
“That’s how a band D home in Hackney gets the payment while a band E home in Blackpool, worth around a third as much, doesn’t.”