Healey delivers first Budget with £100 energy payment and bank tax rise

John Healey has delivered his first Budget as Chancellor, saying it was for 'the working people of Britain' and was built on fiscal discipline. He told MPs it matched immediate action with clear direction for the future and was designed to give households and businesses breathing space from what he called global economic storms, including war in the Middle East that has pushed up energy costs.

The centrepiece is a £100 energy payment for households in council tax bands A to D, a scheme BBC One reported is worth £2.6bn and covers 20 million households. The government also confirmed it will remove standing charges from gas bills. BBC News reported that the Treasury estimates this will save 60% of households an average of £45 a year. Sky News's Lucy said the fixed charge averages just under £110 a year, but that is not the net saving because the cost is shifted onto the unit rate. Lower gas users should gain, while higher users will pay more. Ministers also signalled longer-term reform of the energy market, including moves to decouple gas and electricity prices.

To help pay for the support, the bank surcharge will rise from 3% to 6% for 15 months. BBC News's Andy Verity said the chancellor could have restored it to 8%, the level before it was cut. Sky News's Mark Kleinman reported that the increase will add about £250m to £275m each to the tax bills of major UK banks such as Barclays and Lloyds, and more than £100m to JPMorgan. JPMorgan said singling out banking for extra tax 'lacks principle'.

Other measures include a freeze in fuel duty. BBC One reported that this will prevent increases pencilled in for the new year and that the cut in VAT on electricity bills will be extended. Sky News reported that the national minimum wage and national living wage will rise by 3.9%, the business rate relief threshold will go from £12,000 to £18,000, and self-employed fathers and partners will become eligible for paid parental leave.

The fiscal backdrop remains tight. BBC News reported that the UK spends more on servicing national debt than on defence, and that Healey has little room for manoeuvre while sticking to the fiscal rules laid out by the previous chancellor, Rachel Reeves. It also reported that frozen income tax thresholds amount to the biggest personal tax rise in 40 years, with half a million more people dragged into the highest bracket.

Reaction was mixed. Sky News's Jon Craig said some MPs found the chancellor's speech 'a bit flat', while Labour figures on the left argued the banks had got off lightly because the surcharge was not restored to 8% and will last only 15 months. Opposition parties said the measures were too small, with some calling for deeper welfare cuts and higher defence spending. Alex Forsyth of BBC One said the real question was whether the Budget would be enough.