Britainupdated 1h ago2 min read
Archive photo · 8 January 2025John Healey Raises Bank Profit Surcharge To 6% To Fund £100 Energy Aid For 20 Million Households
8 Western Mainstream3 Local Western2 Other3 Other source typesPhoto: U.S. Secretary of Defense / US federal government, Public domain · Cropped for layout
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Bank windfall tax raised from 3% to 6% to fund energy relief for households. Around 20 million UK households to receive a £100 energy payment this winter.
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Bank surcharge and £100 aid
The British government announced a temporary increase in a surcharge on the profits of banks operating in the United Kingdom to 6%, from 3% currently, to finance energy aid. Finance Minister John Healey said, “In the midst of global economic storms, I am counting on our banks to help finance a bit of relief for British families,” as he presented the first budget of the Labour government of Andy Burnham. Healey said the surcharge would start in January 2027 and end 15 months later, and the government would also provide a direct aid of 100 pounds to 20 million households in England.
The government said the £100 payment would be “paid directly into people’s bank accounts,” and it would be available to households in council tax bands A to D. The Treasury said the Autumn Budget includes an extraordinary £100 aid for up to 20 million households in England in the four lowest bands of the council tax, with a cost estimated at £2.6 billion.
Devolution, VAT, and gas charges
The British government said the payment policy was for England, while it also said funding was available for Scotland, Wales, and Northern Ireland to make equivalent measures. GOV.UK said the Household Energy Payment will provide a £100 payment to households in Council Tax bands A to D in England, and it said the payments will be made from January 2027. GOV.UK said the government asked Ofgem to remove standing charges on households’ gas bills as early as 2027, and it said the essential costs would move to the unit rate in the energy bill.
GOV.UK said the government would also commit to take standing charges off gas bills and support households struggling with energy debt. The BBC said the surcharge on bank's corporation tax would rise from 3% to 6% for 15 months from 1 January 2027 to 31 March 2028, as the government funded the £100 cash payments.
Ukraine, defense, and opposition
Healey announced £10 billion in additional economic and military support for Ukraine, and he said the package included £500 million in urgent military funding for Ukraine this winter.
Anadolu Ajansı reported that Healey said he and UK Prime Minister Andy Burnham informed Ukrainian President Volodymyr Zelenskyy of the support package during a telephone call, and it quoted Healey saying, “He told us 'you've made my day,'”.
NATO Secretary-General Mark Rutte celebrated the announcement, writing on X, “Good news about John Healey’s new budget, with a firm commitment to Defense,” and he highlighted the “vital” role of the United Kingdom in transatlantic security.
Kemi Badenoch responded by asking, “Is that all? Really? Is that all?” and she accused the government of resorting to “more debt, more tax increases, and, shock, more money for social benefits.”
The budget also included a pledge to dedicate 3% of GDP to defense in 2030 and 3.5% in 2035, while the Office for Budget Responsibility projected growth of 1.2% in 2026 and 1% in 2027 and warned that the British fiscal situation remains “very difficult.”