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Chancellor urges Holyrood ministers to give £100 energy payment to Scottish households

Angus CochraneSenior political journalist, BBC Scotland
News imagePress Association John Healey, who is bald, holds up a red ministerial box in front of a crowd on Downing Street Press Association
John Healey announced the Budget in the House of Commons

The Scottish government has been challenged to replicate a UK government scheme giving £100 to households in England in lower council tax bands this winter.

Announcing the measure in the Autumn Budget, UK Chancellor John Healey said Holyrood ministers would receive proportionate funding and urged them to provide the payment north of the border.

The Labour minister said the payment would "help deal with rising energy bills and take the pressure off in the coldest months".

Healey also committed to increasing the minimum wage, scrapping standing charges on household gas bills and extend a VAT cut on electricity bills.

The UK government said the Budget would deliver an extra £600m for public services in Scotland.

The Scottish government has been asked to comment.

Healey told a packed House of Commons that about 20m households south of the border - those in council tax bands A to D - would receive the £100 payment this winter, paid directly into bank accounts.

He said that the Scottish, Welsh and Northern Irish governments would receive funding proportionate to the £2.6bn scheme and urged them to replicate the scheme.

"I call on them to do the same and give people of all nations in the UK breathing space on their energy bills this winter."

There are about 1.9m homes in Scotland in council tax bands A to D, according to government figures. To give each of those households £100 would cost at least £190m.

News imagePress Association An image of coins and small board game-style houses stacked on top, on a bed of paper notes Press Association
The Scottish government will receive extra funding as a result of the UK government's £100 payment scheme

Making his first Budget address, Healey said that cheaper energy was the government's priority.

He confirmed that standing charges for household gas bills are to be removed for 23 million homes across the UK.

Standing charges are fixed fees paid no matter the usage, averaging £108 a year.

Instead, fixed costs will be paid on the unit rate, with the government estimating that 60% of households will save an average of £45 per year.

The change means households that use less gas will pay less, though households that use more will end up with bigger bills.

Such savings will be dwarfed by forecast increases to energy rates, with the typical annual bills expected to go up by £276 from January.

News imagePress Association A large warship passes under a red stell bridge Press Association
The defence spending programme could benefit Scottish shipyards

The chancellor pledged to find about £5bn to fund the Defence Investment Plan, citing cuts across UK government departments.

While increased defence spending could boost naval bases and dock yards in Scotland, spending cuts across Whitehall departments will have knock-on effects for the Scottish Budget.

Other announcements affecting people in Scotland included:

  • Increases in both the National Minimum Wage and the National Living Wage by 3.9%
  • Pensioners on low incomes to be shielded from income tax when the state pension increases
  • A "new wave of devolution" to help boost growth and innovation
  • £18m for an advanced chip design project led by the University of Edinburgh
  • £6m to expand Glasgow's Scottish Event Campus
  • £20m to set up "defence technical excellence colleges" in the east and west of Scotland

Scottish Secretary Doulgas Alexander said: "This is a budget that puts money back in the pockets of Scottish households, backs businesses, and puts Scotland firmly at the heart of the UK government's plan for growth and reindustrialisation."

Scottish Labour leader Michael Marra said that extra funding from the UK government's £100 payment scheme "should be used to give Scots breathing space, not to plug holes in the Scottish Government Budget".

What does this mean for the Scottish Budget?

News imageGetty Images Jenny Gilruth, who has blonde hair, in a close-up shot. She is wearing a business suit. Getty Images
Finance Secretary Jenny Gilruth is due to announce the Scottish Budget next month

Many of the measures announced in the chancellor's Budget apply directly in Scotland.

This is the case with UK-wide taxes, such as fuel and alcohol duty, as well as decisions on policy areas controlled by Westminster, including the state pension and minimum wage.

The Scottish government has extensive devolved powers, with control over income tax rates, health, education, policing and more. That means that announcements in the UK Budget relating to those areas will not apply directly in Scotland.

However, they do have a knock-on impact on how much funding the Scottish government gets from the Treasury, which aims to give devolved nations roughly a population-share of changes in spending in England.

Officials on both sides of the border will now be calculating how much cash is coming to Scotland in 2026-27, with Scottish Finance Secretary Jenny Gilruth due to announce her Budget on 3 December.