Budget 2026: Breathing space today – hope for tomorrow

For many families across North West Cambridgeshire, financial pressure is not caused by one big bill. It is the accumulation of the weekly shop, energy, petrol, travel to work and the everyday costs of keeping a home running.

That is why this Labour Budget matters.

From January, around eight in ten households in England – everyone in council tax bands A to D – are due to receive a £100 Household Energy Payment.

The Labour government is also extending the electricity VAT cut until July 2027 and abolishing standing charges on gas bills. If you use less gas, you should not keep paying a fixed daily charge just for being connected.

There is help for people who rely on their cars, too. The planned five-pence rise in fuel duty has been cancelled and the existing cut extended to July 2027. That matters to people driving to work, taking children to school or travelling to care for relatives – especially where public transport is limited. This will have saved the average driver £230 over this parliament. A 55p per mile tax-free mileage rate for those driving up to 10,000 miles for work will be made permanent, with the rate rising from 25p per mile to 35p above that distance.

The weekly shop matters just as much. Suspending tariffs on more than 100 imported food products, from baked beans to dried fruit, is expected to reduce costs for consumers by £120 million to £185 million a year. This will ease pressure on everyday essentials.

Meanwhile, increases to the National Living Wage and National Minimum Wage are expected to benefit 2.3 million workers, and the state pension will rise by £488 a year from April – equivalent to 3.9% - with old basic state pension to rise by £374.40. Plus, the Labour government is bringing in further support with a new tax-free allowance for low-income pensioners, to ensure those with income up to the value of the full new state pension will not pay income tax.

Family finances also depend on what happens beyond the front door. Local shops, cafés and pubs are the beating hearts of our communities. From April 2027, changes to business-rates will mean half of retail, hospitality and leisure businesses will pay no business rates, with freezes and reductions for others. Helping those businesses stay open helps keep our high streets alive and prices down.

This Labour government is making fair choices: asking banks to contribute more; raising taxes on gambling shops; reforming business rates so vape shops no longer qualify for certain relief; and making marketplaces such as Amazon, eBay and Temu responsible for collecting the VAT owed by their sellers. 

These cost-of-living pressures will not disappear overnight – but this is a Budget that takes the fair decisions and offers some much-needed breathing space today, while laying the foundations for the bigger, longer-term changes needed to make life better and more affordable tomorrow.