The full impact of John Healey’s first Budget on London may only become clear in coming days.
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impact → become → days
The landmark fiscal reforms, the most significant since the creation of the London mayoralty in 2000, will allow City Hall to borrow billions to fund schemes such as the Bakerloo line extension and the West London Orbital.
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Hall → allow → extension
It is expected to make him one of the most powerful mayors in Europe.
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him → expect → Europe
The Chancellor announced what he called a temporary rise in the bank surcharge, currently levied at 3% on top of the 25% corporation tax rate, by an extra 3% to help fund energy support for struggling households.
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he → announce → households
However, the rise is not as steep as had been mooted, to a possible 8% surcharge, and certainly fell well short of the eyewatering sums, of up to £60 billion over four years, being demanded by union chiefs.
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rise → moot → chiefs
The Chancellor announced that he would hike the rates of tax on income from property and savings by a further two percentage points from April next year.
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he → announce → April
It comes on top of an increase of the same size introduced under his predecessor Rachel Reeves at last year’s Autumn Statement, which is due to take effect at the same time.
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which → come → time
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Inflation is forecast to average 3.1% this year and then 3.4% in 2027, in a significant hike to previous forecasts of 2.3% in 2026 and 2% for the following 12 months.
The upward pressure could push up Bank of England interest rates from 3.75% to 4.25% by the middle of next year.
Winner: First-time buyers
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pressure → read → buyers
The new £4.7 billion Your First Home scheme will help around 70,000 households to take their first step onto the housing ladder and support the delivery of an estimated 20,000 new homes, says the Treasury.
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Treasury → help → homes
It will provide 20% equity loans to first-time buyers who would not otherwise be in a position to buy a home.
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who → provide → home
Income caps will be set at £110,000 per household outside London and £140,000 inside the city.
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caps → set → city
Price caps will be based on local authority average prices to ensure support is targeted at those who need it, with inner and outer London caps of £650,000 and £500,000 respectively.
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who → base → 650,000
The deposit requirement will be set at 2.5%, with a maximum deposit of 15%.
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requirement → set → %
While the bank raid on the City was fully out in the open, millions of workers were being quietly hit with the ongoing freeze on the thresholds for paying the basic and higher rates of income tax.
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millions → hit → tax
The Chancellor did not announce any change in the Budget on this stealth tax but it is set to run until 2030/31.
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it → announce → 2030/31
It will see hundreds of thousands more people in London and its commuter area being dragged into paying income tax or the higher rates, and many more simply paying more tax as their income rises.
The Treasury is raking in tens of billions of pounds from the freeze.
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Treasury → see → freeze
Devolving tax powers to City Hall could unlock £10 billion of borrowing to fund major transport schemes in London including the Bakerloo line extension and the West London Orbital.
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Devolving → devolve → extension
These projects could be partly funded by a new levy on businesses which benefit from them, as happened with the financing of the Elizabeth line.
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which → fund → line
A Business Rate Retention Zone (BRRZ) is to be established to fund the scheme.
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Zone → establish → scheme
Mr Healey also gave initial support for Tax Increment Financing, also based on a BRRZ, to upgrade Euston station, mainly through improvements to the Tube.
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Healey → give → Tube
However, there could be a sting in the Budget for commuters as the Chancellor’s figures do not bake in the freeze on regulated rail fares continuing beyond March 2027 so they could rise by around 3% or more, based on the mechanism for setting them linked to inflation.
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they → bake → inflation
Winner: Struggling households
Twenty million households, including two million in London, who are in council tax bands A-D will get a £100 ‘Household Energy Payment’ paid directly into their bank accounts to help deal with rising energy bills.
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who → struggle → bills
The scheme will cost £2.6 billion.
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scheme → cost → billion
The vast majority of these people will also benefit from the axing of standing charges for gas bills, as well as VAT being cut from electricity bills.
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majority → benefit → bills
The tax on income from savings will rise to 24% for basic rate taxpayers from April 2027 after it had been scheduled to rise to 22%.
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it → rise → %
However, the planned cut to the cash ISA allowance from £20,000 a year to £12,000 has been axed.
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cut → plan → 12,000
The Chancellor announced an increase in the threshold for 100% small business rates relief for some hard-hit retail and hospitality firms from £12,000 to £18,000, with tapered relief from £21,000, up from £15,000.
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Chancellor → announce → 15,000
This will mean an extra 70,000 firms taken out of paying business rates altogether, he stressed.
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he → mean → rates
Some 3,500 pubs, 3,900 restaurants, 2,200 cafes and 1,700 hairdressers and beauty salons will be exempted from paying business rates, according to the Treasury.
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pubs → exempt → Treasury
The impact will depend on the size of homes, which is often linked to income, and amount of gas used.
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which → depend → gas
People who run a gas-guzzling Aga are likely to see their bill rise.
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bill → run → Aga
Households with an income below £15,000 will on average be £51 a year better off, those with an income between £40,000 and £49,999 £21 better off, those with an income of between £60,000 and £69,999 around £15 better, according to the research.
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Households → accord → research
Nesta said: "Abolishing the gas standing charge efficiently transfers costs from poorer households to wealthier ones.”
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Abolishing → say → ones
The Aporia
