The government announced plans to extend paternity pay to self-employed fathers for the first time, broadening financial support to over 150,000 additional parents annually. Under the new proposal, fathers and partners who previously did not qualify will become eligible for up to two weeks of paternity pay, valued at as much as £194 per week, enabling them to spend time with their newborn children. This expansion aligns self-employed fathers with self-employed mothers, who already qualify for maternity allowance.
The measures are part of a wider package aimed at addressing ongoing cost-of-living pressures, unveiled by Chancellor John Healey ahead of the upcoming budget. In addition to paternity pay reforms, the package includes a significant change to carer’s allowance. The government plans to eliminate the current "earnings cliff edge," whereby unpaid carers lose their entire allowance if they earn just over the weekly earnings threshold. Instead, the allowance will now taper gradually, reducing by £1 for every extra £1 earned beyond the limit.
Another element of the package affects workers who use their personal vehicles for business purposes. The government will increase the tax-free mileage reimbursement rate to 55 pence per mile for the first 10,000 miles driven, up from the existing rate of 45 pence. For miles beyond 10,000, the rate will rise from 25 pence to 35 pence per mile. The Treasury estimates roughly three million people will benefit from these changes, with some drivers potentially saving up to £300 annually in tax.
The government also announced the removal of tariffs on more than 100 imported products, including various food items, a move expected to save households up to £21 per year on grocery bills. Additional efforts include plans to install hundreds of new Post Office parcel drop boxes to facilitate easier deliveries.
As part of its green initiative, the government introduced a scheme offering low-interest and interest-free loans to homeowners investing in renewable technologies such as solar panels, batteries, and heat pumps.
Prime Minister Andy Burnham commented on the broader agenda, emphasizing the government’s focus on tackling major challenges while also addressing everyday financial concerns affecting citizens. Chancellor Healey acknowledged the impact of international conflicts on domestic living costs but underscored the government’s commitment to providing relief through targeted measures where possible.