The budget brings welcome winter help for rural households but leaves the South Cotswolds facing a cliff edge next summer.
I welcome help on heating oil, red diesel and pub business rates in today’s Budget, but short-term fixes, cuts to warm homes and clean energy, and frozen income tax thresholds leave local families and the environment without a long-term plan.
Targeted support for rural households, farmers and pubs were good to see, but no plan to grow the economy or protect the environment was offered by the Chancellor.
John Healey extended the 5p fuel duty cut and the VAT cut on electricity to July 2027, and announced a one-off £100 Household Energy Payment from January 2027 for households in council tax bands A to D. These are great, but with fuel duty, electricity VAT and red diesel relief all due to end next summer, families across the South Cotswolds face a cliff edge.
The Government has also moved towards Liberal Democrat positions on taxing bank profits and abolishing gas standing charges. But the money raised from doubling the bank surcharge is being spent on a one-off payment, when the Liberal Democrats’ Essential Energy Guarantee would cut £100 from bills every year.
The Budget’s impact on the environment and household bills in the longer term is also concerning. The Chancellor has cut £1 billion from the Warm Homes Plan and £200 million from Great British Energy, with no mention of community energy. The day-to-day budget for the environment department is flat in cash terms while inflation runs at 3.5 per cent.
On water, the Government confirmed that its Water Bill will repeal the ban on public ownership of water companies. I welcome this in principle but note that the Budget contains nothing to tackle sewage pollution or improve river health, issues that residents in Malmesbury, Cricklade and along the Thames have raised with me repeatedly.
On the wider economy, the Office for Budget Responsibility forecasts growth of just 1 per cent in 2027 and warns that living standards will barely recover by 2030. Frozen income tax thresholds will push the tax burden past its previous record of 37.2 per cent of national income in 2027-28. Savers will also pay a further 2 percentage points of tax on savings and property income from April 2027, a change that will be felt by many older residents in the South Cotswolds.
The £2 bus fare cap continues through 2027, but there is nothing to improve the routes and frequency of rural bus services, which many South Cotswolds villages depend on.
I will continue to scrutinise the Government’s spending on climate and nature through my work on the Environmental Audit Committee, and will raise the impact of the Budget on rural households directly with the Government.
