Budget 2026: Reaction from Lancaster and Morecambe area

A charity helping people in the Lancaster and Morecambe area says the 2026 Budget is welcome in parts but "does not go far enough".

Citizens Advice North Lancashire has urged the Government to be bold, saying people in our District face a difficult winter and the Budget has not "met the scale of the challenge facing local households".
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The Budget, announced by John Healey, Chancellor of the Exchequer, on Wednesday, includes £100 of support for households in Council tax bands A to D to help with rising energy bills, as well as the removal of standing charges from household gas bills.

"We welcome this £100, but with energy prices set to rise in January, it isn’t going to go very far," said Joanna Young, the charity's CEO, who appeared on Sky News and BBC Breakfast this week to describe what advisers are seeing every day in Lancaster and Morecambe.

"It doesn’t even cover the average weekly shop. We need urgent, targeted support.

"Every day we are seeing people in Lancaster and Morecambe who are facing destitution, and the money simply isn’t adding up.

"Energy and rent costs have soared, yet wages and benefits haven’t kept pace.

"People are going further and further into debt, and that means they’re not turning the heating on, sometimes to dangerous levels, which risks their health. We need the Government to be bold.

“The Government is taking measures to reduce homelessness, but by not moving on Local Housing Allowance rates it will likely push more people into the threat of eviction and homelessness.

"Unaffordable housing, energy debt and the cost of living are hitting local people hard, and we are expecting a tough and busy winter at the charity.

“We used to talk about the cost-of-living crisis as something temporary, but it’s no longer a one-off event that people live through and come out the other side. It’s now baked into the fabric of people’s lives. It’s a monthly reality for millions, and it is pushing debt to record levels.

“It’s completely understandable to feel worried about bills, but you do not have to face it alone. If you are struggling, contact us at Citizens Advice North Lancashire.

"Don’t ignore bills or letters about money you owe, and if you can’t afford your energy bills, speak to your supplier or look for a cheaper tariff. Our website has advice on which bills to prioritise and how to manage debts, and our frontline advisers can help you understand what support you may be eligible for.”

Ms Young appeared in a Sky News feature this week, as the television cameras visited Morecambe to speak to people about how the Budget would affect them.

People and politics correspondent Nick Martin said: "Here on the Lancashire coast, rising costs and falling living standards have hit hard.

"The squeeze just hasn't let up and they are looking to the Chancellor for some relief."

He spoke to sisters Hayley Clarke and Abi Dakin from Abi's Arrangements flower shop in Bare, about the Budget announcement of a rise of 3.9 per cent in the National Living Wage, coming into effect in April 2027.

"I don't think you ever really know how that's going to benefit you until it actually happens, and how much you've got there each month to spend and haven't got to spend," said Hayley, during the Sky News report.

"It's positive for me. It's difficult for Abi."

Abi, who owns the shop, said: "It's going to cost another about £350 a month which we now have to find. Do you know what? We'll just have to deal with it, I'll just have to work that little bit harder."

Also in the Budget, it was announced that the small business rates relief threshold for retail, hospitality, and leisure properties will increase from £12,000 to £18,000 starting in April 2027. 

The Sky reporter spoke to Morecambe publican Chris Donaldson (below), saying he'd been hoping for a VAT cut on hospitality, which didn't come. 

But on help on business rates, Mr Donaldson said: "It's a start, I suppose we've got to look at some positives from it.

"I don't begrudge paying people more than minimum wage as long as we're busy and we're getting support in other areas, that's absolutely fine."

Meanwhile Cat Smith, MP for Lancaster & Wyre, welcomed the new £2.6bn Government package to help households with rising energy bills this winter, alongside measures to support local high streets.

“Here in Lancashire, Reform said they'd cut Council tax but instead they put it up - so Labour are acting," said Ms Smith.

"This £100 Council tax rebate will provide welcome relief for households across Lancaster and Wyre, helping people manage their energy bills when they need it most."

She said the help on business rates would mean half of all retail, hospitality and leisure properties will pay no business rates, estimated to benefit around 638 properties in Lancaster and around 640 properties in Wyre.

“Our independent shops, cafés and other small local businesses are at the heart of our high streets, and this relief will keep our town and city centres vibrant places to visit," she said.

"We're giving some breathing space to families, backing our high streets and entrepreneurs, with fresh hope for the future.”

Ms Smith also welcomed the expansion of paternity pay to self-employed fathers and non-birthing parents for the very first time, in a Budget measure aimed at giving hardworking families expecting a baby some room to breathe.

“People who work for themselves help keep Lancaster and Wyre going. They’ve been left out of paternity pay for too long, and I’m pleased the Government is putting that right. It is a mark of respect for hard working people and the vital roles many also play as parents.”

But David Morris, former Morecambe and Lunesdale MP and Conservative Parliamentary candidate for the next election, said the Budget "hammered your cost of living".

"As the (Sky News) interviewer said, 'Morecambe’s been promised millions' - where is it?" he said in a post on his official Facebook page following the Budget.

"When I was your MP, I delivered millions and real change, only for Labour to kick the can down the road. The false promise of a Labour utopia has left us with stalled projects, record business closures, and a budget hammering your cost of living. The Eden Project should be open right now and our town booming.

"Come on Morecambe, you deserve better. I’m standing again to sort this mess out. Together, let’s finish what I started."

BUDGET 2026 AT A GLANCE

Energy bills and cost of living help

• One off £100 payment for up to 20 million households in Council tax bands A-D to help deal with rising energy bills

• Standing charges – fixed daily fees customers pay regardless of usage – to be removed from household gas bills, with costs added to the unit rate instead

• VAT cut on electricity bills extended to July

• A green levy - the Gas Shipper Obligation to fund hydrogen projects - to be removed from energy bills and put on to general taxation

• Freeze on fuel duty extended again to July

• Import taxes to be removed on more than 100 food products, including gherkins and marmalade, as well as kerosene and fertilisers

• A 55p per mile tax-free mileage rate for those driving up to 10,000 miles for work made permanent, with the rate rising from 25p per mile to 35p above that distance

• A new scheme taking 25 per cent off electricity bills for 10,000 energy-intensive businesses to launch in April, with payments backdated for energy costs this year

Taxes

• An extra 2 per cent tax on income from savings and property rental from April

• Amount people can put into tax-free cash Isas (Individual Savings Accounts) to remain at £20,000 a year, with plans to lower the limit to £12,000 for under-65s scrapped

• Surcharge banks pay on their profits to rise from 3 per cent to 6 per cent for 15 months, starting in January

• Threshold at which High Street shops start paying business rates in England to be increased from £12,000 to £18,000, meaning businesses would pay no rates on properties with a rateable value below this level

• Adult games centres and vape shops will no longer qualify for certain business rates relief

• Taxes on gambling machines with stakes over £1 to rise from 20 per cent to 25 per cent

• Online marketplaces like Amazon, eBay and Temu to be made responsible for collecting VAT owed by sellers using their platforms

Wages, benefits and pensions

• New, flat-rate state pension to rise by £488 a year from April – equivalent to 3.9 per cent - under the triple lock policy, with old basic state pension to rise by £374.40

• A new tax-free allowance for low-income pensioners, to ensure those with income up to the value of the full new state pension will not pay income tax

• Legal minimum wage to rise by 3.9 per cent in April 

• Unpaid carers will no longer lose their entire Carer's Allowance if they earn more than £204 a week after tax, with a taper rate introduced instead

• Parental pay extended to self-employed fathers and parents in same-sex couples

Housing and property

• New scheme to help first-time buyers in England purchase a home, offering government-backed loans to households earning less than £110,000

• A new First Time Buyer ISA to be introduced from April 2029, to replace the Lifetime ISA and help people save a deposit for their first home

• Lifetime ISA holders buying a property above the £450,000 cap will pay a reduced withdrawal charge of 20 per cent, down from 25 per cent

•  An extra £1bn for social and affordable housing in England, taking total funding for the 10-year programme to more than £40bn

• An extra £432m for a programme aimed at giving every rough sleeper in England a route off the streets by Christmas