UK Budget adds minimum wage rise, energy payment and extra funding for Northern Ireland

Chancellor John Healey presented his first budget, outlining a 3.9% rise in the national minimum and living wages that will affect 2.3 million low-paid workers. He also announced a £100 winter energy payment for 20 million households in council tax bands A to D, a scheme costing £2.6 billion.

The budget includes a £140 million investment in a new British data-centre covenant and a £20.4 billion boost for the National Wealth Fund and the British Business Bank, aimed at supporting fast-growth firms and creating jobs. Healey said the measures will help meet fiscal rules on spending and debt reduction.

Northern Ireland will receive an extra £270 million through the Barnett formula, although many of the budget’s spending announcements do not automatically apply to the region because health and education are devolved. PwC economist Greg Boyd noted that the fuel-duty freeze and the minimum-wage increase could benefit households, but the overall impact depends on how the Executive allocates the new funding.

Hospitality Ulster chief Colin Neill warned that hospitality businesses face “significant financial pressures” and called for any Barnett-formula funding linked to UK hospitality measures to be ring-fenced for the sector. Retail NI chief Glyn Roberts said the budget’s business-rates relief for England should be mirrored in Northern Ireland, stressing the high vacancy rates on local high streets.

Healey also pledged reforms to self-assessment tax collection, a new pension tax allowance for low-income retirees, and changes to VAT rules for larger taxi firms. He reaffirmed the government’s commitment to fiscal discipline, stating that borrowing is projected to fall to 4.2% of GDP this year and that the deficit is expected to be eliminated within three years.