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Chancellor John Healey presented his first Budget this week, and the first under Prime Minister Andy Burnham. It was billed as a Budget to give ‘breathing space’ to households and businesses, and it offers a series of targeted financial breaks.

The Office for Budget Responsibility (OBR) expects growth of 1.2% this year, slowing to 1.0% in 2027, before recovering to between 1.6% and 1.8% a year for the rest of the decade. Inflation is expected to peak at 3.8% early next year and return to target in 2028.

The Chancellor’s room for manoeuvre has narrowed significantly since taking on the job a few months ago. Higher debt interest has cut the Government’s headroom from £23 billion in the Spring to £15 billion, and the Budget avoids broad tax rises, instead relying on targeted measures such as a temporary increase in the tax on bank profits and higher tax on savings and property income. The Budget also warns that not every department will see a real-terms increase at next year’s Spending Review. For services that sit outside protected budgets, including local government, this points to another tight settlement, and we expect the 2027 Spending Review to be the decisive moment for Trading Standards funding.

The centrepiece of the Budget is help with energy bills. The VAT cut on electricity has been extended to July 2027, taking around £50 off the annual price cap, and households in council tax bands A to D in England will receive a £100 Household Energy Payment from January. Gas standing charges will be abolished, the 5p cut in fuel duty extended to July 2027 and tariffs lifted on more than 100 food products. The OBR expects real disposable income per person to be only around 2% higher in 2029-30 than before the pandemic. That cost-of-living pressure pushes consumers towards cheaper goods and quick fixes, which is where we see illicit tobacco and vapes, unsafe products and scams take hold. Support for household budgets needs to be matched by protection from those looking to exploit them.

For Trading Standards, the most notable development is the Government’s focus on the high street. From April 2027, vape shops and Adult Gaming Centres will lose their business rates relief, and Machine Games Duty will rise on higher-stake machines. This sits alongside a new High Streets Strategy and Home Office work to tackle organised crime run through high street businesses. CTSI welcomes this recognition of the problem, which our Hidden in Plain Sight report set out in detail. But the change is worth only around £10 million a year, and a rates bill will not close a shop selling illegal vapes, counterfeit goods or illicit tobacco. That takes enforcement. We will be seeking assurances that Trading Standards has a central role, and fair funding, in delivering the Strategy.

The Budget also takes further steps on illicit vapes and tobacco. The Government has launched a consultation on a Nicotine Approval Scheme, which would control the supply of high-strength nicotine to stop illegal vape liquid being made in the UK. There will also be new penalties for deliberately evading excise duty, and new standards to stop shops using rigged tills to hide their sales. CTSI welcomes action to cut off illegal supply chains at source and will respond to the consultation. These measures will only work if they are joined up with the intelligence and enforcement work Trading Standards teams carry out on the ground.

From October 2027, online marketplaces will be responsible for collecting VAT on behalf of larger UK sellers, with the money raised going back into the high street. CTSI welcomes this acceptance that platforms should take responsibility for what is sold through them. If marketplaces can be held responsible for the tax owed on a product, they should also be held responsible for making sure that product is safe. We will continue to press the Government to apply the same thinking to consumer protection.

The Chancellor also announced a £600 million package to protect the UK from AI risks. Consumers are already being targeted by scams using AI-generated adverts, fake reviews and cloned voices. We want to see this work address the harms consumers face every day, drawing on Trading Standards’ frontline understanding of how these scams operate.

The Government has also gone further on its plan to cut the cost of regulation for business by a quarter by the end of the Parliament. It is setting up a new ‘Better Regulation’ Executive at the centre of government. CTSI supports regulation that is clear, proportionate and easy for honest businesses to follow. But cutting red tape must not mean cutting the protections that consumers and legitimate businesses rely on. We will seek early engagement with the new Executive so that the experience of local regulators shapes its work.

The Chancellor also confirmed that 100% of business rates will be retained locally by the end of the decade. From next year, 20% of business rates revenue will go to mayors, with a share of income tax receipts following from 2028, alongside new ‘Good Growth Funds’ and £1.5 billion in devolved loans for Mayoral Authorities. Greater local control over funding is welcome. However, Trading Standards services are delivered by upper-tier and unitary councils, not mayors. As funding moves towards mayoral authorities, and as local government reorganisation reshapes councils, there must be a clear route for that money to support the regulatory services that protect consumers and honest local businesses.

While the Budget shows concerted action to ease immediate pressure on households, CTSI remains concerned that, once again, there is no dedicated funding for Trading Standards. Consumer harms are becoming more complex, from illicit vapes and unsafe products sold online to AI-enabled scams linked to cost-of-living pressures, and the demands on local services are growing. CTSI will continue to press for clear and sustained investment in Trading Standards ahead of next year’s Spending Review.

Headline Announcements

Consumers and the High Street

• New High Streets Strategy launched, including £210 million to revitalise derelict high street buildings
• Home Office to crack down on organised crime operating through high street businesses
• Vape shops and Adult Gaming Centres in England to lose business rates relief from April 2027, with vape shops also losing Small Business Rates Relief
• Consultation launched on a Nicotine Approval Scheme to control high-strength nicotine and tackle illegal vape liquid made in the UK, planned from April 2028
• New penalties for deliberately evading excise duty
• New standards for shop till systems to stop businesses hiding their sales
• Machine Games Duty on higher-stakes gaming machines to rise from 20% to 25% from April 2027, with lower-stakes machines in pubs and seaside arcades protected
• Alcohol duty to rise in line with inflation from February 2027, with £10 million a year in extra relief for over 2,000 small brewers and cider makers
• Online marketplaces to collect VAT on behalf of UK sellers with sales over £90,000 from October 2027
• Government to consult next year on making technology more secure and on who should be liable for cyber breaches

Regulation and Business

• Up to £640 million a year of new savings for business from cutting the paperwork of regulation, towards a 25% reduction by the end of the Parliament
• New Better Regulation Executive to drive a more streamlined and proportionate regulatory system
• Regulation for Growth Bill to allow businesses to safely trial new products and approaches
• Around 70,000 more small shops, pubs, restaurants and cafés to pay no business rates from April 2027
• Business rates for other shops and hospitality businesses frozen in real terms for two years
• Extra 20% business rates relief for pubs, music venues and social clubs

Local Government

• Councils and regions to keep all business rates by the end of the decade
• Mayors to receive a share of business rates from April 2027 and a share of income tax from 2028-29
• Regional leaders able to introduce visitor levies
• £285 million for new Good Growth Funds in 2027-28
• £190 million to bring derelict buildings back into use and save community assets such as pubs and sports clubs
• £100 million for councils to give extra help to households struggling with energy bills
• Cheaper borrowing for councils building council homes extended for a further year

Economy

• Growth forecast at 1.2% in 2026 and 1.0% in 2027, never rising above 2% to 2031
• Inflation expected to peak at 3.8% in early 2027 before returning to target in 2028
• Headroom against the Government’s fiscal rules cut to £15 billion
• Around £14 billion a year in extra debt interest since the Spring
• No rise in the main rates of income tax, National Insurance or VAT
• Temporary increase in tax on bank profits from January 2027 to March 2028
• Tax on savings and property income to rise by a further two percentage points
• Cash ISA allowance kept at £20,000
• National Living Wage to rise by 3.9% to £13.21 an hour from April 2027

Energy and Cost of Living

• VAT cut on electricity extended to July 2027, taking around £50 off the annual price cap
• £100 Household Energy Payment for up to 20 million households in council tax bands A to D in England from January 2027
• Gas standing charges to be abolished, with reform of electricity standing charges to follow
• New plan to tackle household energy debt
• No new policy costs to be added to energy bills until a new cost control framework is in place
• 5p cut in fuel duty extended to July 2027
• Tariffs suspended on over 100 food products, expected to save consumers up to £185 million a year
• Self-employed fathers and partners eligible for paid parental leave for the first time