Yesterday’s budget was designed to help people with the cost of living. Here are some of the actions being taken by your Labour government.
£100 off energy bills
Up to 20 million households nationally will benefit from a new £100 Household Energy Payment in 2027. In England, households in Council Tax bands A to D will qualify, meaning many Durham residents will benefit.
The Government is also extending the temporary VAT reduction on domestic electricity until July 2027, taking around £50 off annual energy bills from April.
Tackling energy debt and making homes warmer
The Government has asked Ofgem to abolish gas standing charges and is pursuing reforms to electricity standing charges. A new strategy will also help households struggling with energy debt.
New Warm Homes loans will help families install solar panels, batteries and heat pumps, potentially saving up to £550 annually on energy bills.
A pay rise for the lowest-paid workers
From April 2027, the National Living Wage will rise by 3.9% to £13.21 an hour, worth approximately £910 more a year for a full-time worker.
Thousands of workers in Durham’s shops, hospitality venues, care sector and other lower-paid industries could benefit.
Supporting pensioners, carers and parents
The Budget includes reforms to Carer’s Allowance to remove the earnings cliff edge, helping unpaid carers combine work with caring responsibilities.
A new Pension Tax Allowance will protect pensioners whose income is no higher than the full new State Pension from Income Tax during this Parliament.
Changes to parental pay will make more than 160,000 additional parents eligible nationally, while former mineworkers will benefit from reforms to their pension arrangements.
Cutting everyday costs
Tariffs will be removed from more than 100 products, including everyday supermarket items.
The existing 5p fuel duty cut will continue, with the planned inflation-linked increase delayed until July 2027. More generous tax-free mileage allowances will help workers who use their vehicles for work.
Drivers relying on lower-powered public electric vehicle chargers could also save an average of £150 annually.
£1.5 billion more for affordable housing
An additional £1.5 billion will be invested nationally in social and affordable housing, bringing planned investment over the next decade to more than £40 billion.
This could help Durham build more affordable homes, regenerate neighbourhoods and create jobs in construction.
Planning changes will also make it easier to bring smaller brownfield sites back into use.
Helping first-time buyers
A new Your First Home Scheme aims to help 70,000 people nationally onto the housing ladder, alongside a new First Time Buyer ISA and changes to Lifetime ISA withdrawal penalties.
Tackling homelessness
A further £432 million will be invested nationally over two years to tackle rough sleeping, supporting services that help people into secure accommodation.
This could strengthen support for vulnerable residents in Durham and the organisations working to prevent homelessness.
Lower business rates for small businesses
The Small Business Rates Relief threshold will increase from £12,000 to £18,000, meaning around 70,000 additional properties nationally will pay no business rates.
Half of retail, hospitality and leisure properties are expected to pay nothing, while a two-year real-terms freeze will provide further support.
This builds on the additional 20% business rates reduction for eligible pubs and live music venues announced earlier this year.
These measures could provide welcome relief for Durham’s independent shops, cafés, pubs and restaurants, helping protect jobs and support our high streets.
Lower energy costs for industry
From April 2027, the British Industrial Competitiveness Scheme will cut electricity bills by up to 25% for more than 10,000 eligible businesses nationally.
Manufacturers and suppliers across the North East could benefit, helping protect skilled jobs and encourage investment.
Backing entrepreneurs and small businesses
The tax-free trading allowance will triple from £1,000 to £3,000, alongside new support for young entrepreneurs, innovative businesses and research and development.
The British Business Bank is increasing its commitments to women-led businesses and funds to £200 million.
Changes to public procurement will also make it easier for British businesses, including Durham firms, to compete for government contracts.
Restoring the Union Learning Fund
The Government has announced the return of the Union Learning Fund, with £15 million annually to support workplace learning and training.
This will help workers gain qualifications, develop new skills and improve their career prospects.
More apprenticeships for young people
Plans to expand local apprenticeship services will help connect more young people with employers and provide routes into skilled careers.
£700 million investment in artificial intelligence
A £700 million package will support British AI companies, research, skills and cyber security.
With Durham’s universities, research institutions and growing technology sector, this could create opportunities for innovation, investment and skilled employment.
Backing British industry
The National Wealth Fund and British Business Bank will receive an additional £20.4 billion in financing capacity to support business growth, with the Government expecting around 140,000 jobs to be created or supported nationally.
A £2 billion Energy Wealth Fund will support energy infrastructure, while investment in Rolls-Royce technology and life sciences could provide opportunities for North East supply chains.
More powers and funding for our region
The Budget includes plans to give regional mayors greater control over investment.
From 2027, mayors will receive a share of business rates revenues, with an assigned share of income tax revenues following from 2028.
Additional funding and borrowing powers could help the North East Combined Authority invest in transport, regeneration, housing, skills and jobs.
Fairer government investment
Reforms to the Treasury’s Green Book will change how major public investment decisions are assessed.
These changes aim to remove barriers that have historically disadvantaged areas outside London and the South East, potentially helping Durham secure more investment.
International Investment Summit coming to Gateshead
The next International Investment Summit will take place in Gateshead in spring 2027, showcasing the North East to investors from around the world and creating opportunities to attract new businesses and jobs.
Improving NHS treatment
A £100 million investment from the NHS Transformation Fund will expand robotic-assisted surgery across England, potentially benefiting Durham patients as the technology becomes more widely available.
Supporting children’s reading
An additional £15 million will support organisations including BookTrust and Dolly Parton’s Imagination Library, helping children access books and develop reading skills.
Protecting local services
The Government has also announced upgrades to 600 Post Office branches and 1,000 new parcel drop boxes nationally, helping make everyday services more accessible.
Find out more: https://www.gov.uk/government/news/budget-2026-breathing-space-for-today-hope-for-the-future
Concrete measures that will make a difference in the City of Durham constituency
City of Durham MP Mary Kelly Foy responded to the budget announcements. She said: “As the Chancellor and the Prime Minister promised, this wasn’t a budget for grand statements, but rather one that recognised the difficulties that people, families and businesses are facing, and giving them some breathing space right now.
“So I was pleased to see some concrete measures that will make a difference in the City of Durham constituency.
“Thanks to this Labour Government, as well as cutting VAT from gas bills, houses in council tax bands A – D will get £100 to help deal with rising energy bills. That is over 41,000 homes in the City of Durham constituency alone. And I am delighted to see that, after I campaigned tirelessly on this, the Government will increase Small Business Rates Relief for some retail, hospitality and leisure properties, with a rate freeze for the others.
“On top of this, we will see more help for first time buyers, additional funding for social and affordable homes, as well as an extension to paternity leave including for self-employed people.
“This budget includes genuine steps to support people through difficult times, and I’m pleased that constituents and businesses in the City of Durham will benefit from these measures. The work is nowhere near done though, and if you know me at all by now, you’ll know that I’ll be continuing to push for more for my constituency.”