HM Treasury announces Budget 2026 measures and £600 million for Scotland

What was announced

HM Treasury outlined several spending and policy decisions targeting energy costs, wages, industry, and Scottish public finances. Energy measures extend 0% VAT on electricity to 30 June 2027 and remove the 4% kerosene heating oil tariff. Gas bill standing charges drop to save homes roughly £45 a year, while a Debt Relief Scheme will write off crisis-era energy debts for qualifying households.

Minimum hourly pay rates rise by 3.9% across age groups, pushing the National Living Wage to £13.21. For businesses and infrastructure, the UK government created an Energy Wealth Fund, provided £18 million for an advanced chip design academy at the University of Edinburgh, allocated £20 million for two defence colleges, and set aside £6 million for Glasgow's Scottish Event Campus. The Scottish Government gets £600 million in additional funding, adding to its block grant.

What it means

Scottish households receive direct reductions on fuel, food, and energy expenses over the coming months. The extension of the 5p fuel duty cut and the 3.7p red diesel duty cut reduces transport costs for drivers and rural workers through mid-2027. Removing food tariffs on over 100 imported items gives modest savings on groceries. Low-income pensioners benefit as 93,000 individuals will pay less or no income tax due to administrative tax adjustments by the end of this Parliament.

The added £600 million gives the Scottish Government more funds for devolved public services. Because providing services across Scotland costs more, the devolved government receives at least £1.20 per person for every £1 spent per person in the rest of the UK. Meanwhile, defence investment of £15 billion supports 12,200 jobs across the Scottish defence industry.

What the announcement does not tell us

The Treasury does not state the exact eligibility criteria or launch date for the energy Debt Relief Scheme. It also does not clarify how or when gas bill standing charges will be completely eliminated beyond initial cuts.

The document omits specific timelines for building the two Defence Technical Excellence Colleges. Additionally, the £6 million allocation for expanding Glasgow's Scottish Event Campus remains subject to a business case, leaving final funding approval unconfirmed. Finally, the announcement does not specify how the Scottish Government must allocate the additional £600 million across its devolved public services.