Budget at a glance: What has John Healey announced?

John Healey has set out his first Budget as Chancellor with a bid to provide “breathing space” for the public amid a difficult domestic economic situation made worse by the turmoil of the Iran war.

Here, the Press Association takes a look at the key spending pledges and economic announcements the Chancellor has outlined.

– Headroom

Mr Healey has lowered his fiscal headroom – the buffer the Government has above its self-imposed spending rules – to £15 billion in 2029-30.

This is down from the £22 billion Rachel Reeves set out last year through raising taxes, but he said it would rise to match that figure in 2030-31.

– Energy

A “cost control framework” to drive down bills will be brought in, he said.

Standing charges on gas bills will be scrapped from next year, with fixed costs to be paid on the unit rate instead.

The Treasury said this could save 60% of households an average of £45 on their annual bills.

Similar reforms will follow for electricity bills, Mr Healey said.

A VAT cut on electricity will be extended to July, which the Chancellor said would take £50 off the annual price cap.

Energy payments of £100 will go to around 20 million households in council tax bands A to D.

A green levy – the Gas Shipper Obligation to fund hydrogen projects – will be axed from energy bills and put on to general taxation.

– Banks

There will be a temporary rise in the bank surcharge, currently levied at 3% on top of the 25% corporation tax rate, by an extra 3% to help fund energy support.

– Gambling

Gambling taxes will be hiked to pay for a high street support package, including by increasing machine games duty from 20% to 25% for higher stakes machines.

– Motorists

The fuel duty freeze has been extended for the 16th year at 52p a litre, cancelling a planned increase set for January.

A higher tax-free mileage allowance of 55p will be made permanent.

– Business

The Chancellor pledged a further £20.4 billion for the National Wealth Fund and the British Business Bank over the coming years.

He said he would triple the trade allowance – the amount you can earn from a new venture tax-free – from £1,000 to £3,000, and bring in a new allowance to cover a year of living costs for young entrepreneurs.

The British Business Bank will double its commitments to women-led businesses and funds to £200 million.

And there will be an increase in the threshold for small business rates relief for retail hospitality and leisure businesses from £12,000 to £18,000.

– Housing and savings

The tax-free cash Isa limit will remain at £20,000, scrapping a plan to reduce it to £12,000.

The Lifetime Isa penalty for those buying homes that cost more than £450,000 will end, with a new First Time Buyer Isa replacing it.

The “Your First Home” equity loan scheme will get £4.7 billion of government-backed lending.

The rough sleeping programme will get a further £432 million to get people off the streets in England.

– Workers

The minimum wage for both under and over-21s will rise by 3.9%, ending the trend of hiking pay for those aged 18 to 20 on the national minimum wage more than older workers on the national living wage.

The Chancellor vowed to replace the Carers’ Allowance cliff-edge, which has penalised unpaid carers for going over their earnings limit, with a taper system.

Parental pay will be expanded to more than 150,000 parents each year, with self-employed fathers and partners made eligible for the first time.

– Pensions

Pensioners on low incomes will be shielded from income tax, as a new tax allowance is to be introduced for pensioners if increases to their payments take them over the threshold of £12,570.

– Defence

Mr Healey said he would “fully fund” Britain’s defence investment plan (Dip), Sir Keir Starmer’s plan that promised £15 billion but only committed £10.3 billion to fund it.

The funding would come from moves including “capital reprioritisation across Whitehall”, the Chancellor said.

Details of how the UK will meet its Nato commitment to spend 3.5% of GDP on defence by 2035, with a target of 3% in 2030, will be set out at next year’s spending review.

Ahead of that, he will launch a new “innovative defence finance taskforce”.

– Olympics

A £7 million fund will be used for a feasibility study into a possible future bid to hold the Olympics and Paralympics in northern England.

– Devolution

The Government will devolve business rates and some income tax revenue to allow regions to invest in large infrastructure projects.

All business rates will be kept by local administrations by 2030, with a fifth to go to mayors from next year, and from 2028 a share of income tax receipts will go to mayors.

The Chancellor said these moves, paired with the tourist tax due to come into force, will provide “long-term funding streams”.

Devolved loans worth £1.5 billion will allow mayoralties to carry out projects such as the Black Country Metro, the reopening of Doncaster Airport or regeneration in Gateshead, he said.