If you would like to read Rachel Reeves Budget in full it can be found on the Government website here.

Summary

• This is a Budget that fixes the foundations to deliver change by, fixing the NHS and
rebuilding Britain, while ensuring working people don’t face higher taxes in their payslips.

• The choice at this Budget is clear: five more years of the same failed Conservative
policies and more austerity that leaves working people having to pick up the bill. Or change with a Labour Government that will invest in Britain’s future so we can fix the NHS and rebuild our country.

• The Conservatives crashed the economy, sending mortgages through the roof, and then called an early election to avoid having to deliver this Budget. They wasted billions of pounds of taxpayers’ money on their failed asylum system, propping up private rail companies and dodgy COVID contracts – leaving a £22 billion black hole in the nation’s finances and public services on their knees.

• The choices we have made turn the page on the last 14 years, when the Conservatives constantly chose to pick the pockets of working people.

• The Budget takes tough decisions on spending and welfare by cracking down on fraud, tax avoidance and waste, and making sure every penny of taxpayer money is spent wisely.

The Labour Government will make sure that those who make their home in Britain, pay their taxes here too by abolishing the non-dom status.

• Whereas the Tories always asked working people to pick up the bill, Labour will ensure working people won’t face higher taxes in their payslip, with no increase in National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.

• We are choosing to protect working people and that means asking the wealthiest and businesses to pay their fair share to increase funding for public services, so we can fix our NHS and cut hospital waiting lists.

• This Budget is focused on “investment, investment, investment” so we can get the economy moving again. Labour will take the long-term decisions needed to grow our economy to rebuild Britain and fix our schools, hospitals and broken roads.

• The Conservatives have not changed. All they offer is more of the same: more decline, more austerity and working people paying the price. The only plans for the economy their candidates to be leader have set out are cutting maternity pay, the minimum wage and handing tax breaks to oil companies.

• This Budget delivers the change our country voted for.

• It is the start of a new chapter towards making Britain better off: more pounds in people’s pockets. An NHS that is there for you when you need it. And businesses creating wealth and opportunity for all. It is a Budget that invests in Britain’s future so, alongside business, we can build the homes, the infrastructure, the roads and the railways our country needs.

Key Announcements

Supporting working people

• The Conservatives constantly chose to pick the pockets of working people.

• Labour will ensure working people won’t face higher taxes in their payslip, with no
increase in National Insurance, the basic, higher, or additional rates of Income Tax, or
VAT.

• We are increasing the National Living Wage to allow for an increase of 6.7% to £12.21 per hour for full time workers on the NLW – worth up to £1,400 for a full-time worker.

• And we are maintaining the fuel duty freeze and temporary 5p cut for 25-26.

Fixing public services

• Public service performance is at historic lows. Performance would have worsened under previous government plans to make real terms cuts in public investment of £10 billion over this parliament.

• Instead, we are growing day-to-day spending on essential services in real terms between 2023-24 and 2029-30.

• This includes an extra c£25.6billion over two years for the NHS, to cut waiting times
with 40,000 extra elective appointments a week, and build capacity for more than 30,000 additional procedures.

• And supporting the recruitment of 6,500 teachers by increasing the Core Schools Budget by 2.3bn next year

Boosting investment

• Boosting public investment by over £100 billion over the next five years whilst keeping debt on a downward path, with a greater focus on value for money and delivery to help unlock long-term growth.

• This includes investing £20.4 billion into in Research & Development, and adding £500 million to the Affordable Homes Programme.

Taking the tough decisions to restore stability

• To fix the foundations we are taking tough decisions on tax, spending and welfare to restore Britain’s economic stability.

• This includes taking a balanced approach to adjusting the rate of Capital Gains tax, a tax paid by fewer than 1% of adults each year. The rate will change from 10% to 18% on the lower rate and 20% to 24% on the higher.

• Making the inheritance tax system fairer by keeping thresholds at existing levels until 6 April 2030, and bringing unused pension funds and death benefits payable from a pension into the scope of inheritance tax, making their treatment consistent with other products, such as ISAs.

• Increasing the rate of Employer National Insurance Contributions by 1.2 percentage
points to 15% and reducing the Secondary Threshold from £9,100 to £5,000 per year. In making this choice, the government is also choosing to protect small businesses by increasing the Employment Allowance to £10,500 and expanding this to all eligible
employers. The OBR expects 250,000 employers to gain from these changes and an
additional 820,000 will see no change.

• This is alongside previous tax commitments to abolish the non-dom tax loopholes;
reform Stamp Duty Land Tax so those who buy second homes pay 2 percentage points more than before; extend the Energy Profits levy on oil and gas companies; and end the VAT exemption and business rates relief provided to private schools.

Appendix – Budget Summary

At Autumn Budget 2024 the government is:

• Strengthening the fiscal framework with new fiscal rules to put the public finances on a sustainable path and taking difficult decisions on tax, welfare and spending to
restore stability and pay for increased funding for public services.

• Growing day-to-day spending on essential services in real terms between 2023-24
and 2029-30 to support public services, including to deliver 40,000 extra elective
appointments a week and reduce NHS waiting lists.

• Boosting public investment by over £100 billion over the next five years whilst
keeping debt on a downward path, with a greater focus on value for money and delivery to help unlock long-term growth.

Inheritance

In July the Treasury published an audit of public spending. This set out £22 billion of in-year pressures. These pressures were not limited to 2024-25, with the vast majority recurring in future years.

In addition to resetting departmental spending to address these pressures, the government is fully recognising compensation payments for victims of the Infected Blood and Post Office Horizon IT scandals. This Budget provides for compensation payments in full, at an average cost of £2.3billion a year over six years.

Policy Decisions

To deliver on the promise of change, we are putting stability and investment at the heart of our agenda, by:

Strengthening the fiscal framework: To support economic stability and underpin the
commitment to fiscal responsibility, the government is confirming its robust fiscal rules alongside a set of responsible reforms to the fiscal framework that improve certainty, transparency and accountability:

1. The stability rule will bring the current budget into balance, so that day-to-day costs are met by revenues and the government is only borrowing for investment.

2. The investment rule will ensure that net financial debt (public sector net financial
liabilities) is falling as a proportion of GDP.

We are taking tough decisions on spending and welfare – cracking down on fraud, tax avoidance and waste, making sure every penny of taxpayer’s money is spent wisely. In July, the government announced £5.5 billion worth of savings in 2024-25 to bring down in-year spending pressures. We are now going further by:

a) Not tolerating waste, with new provisions to ensure that every penny the
government is already spending is being put to good use – appointing a Covid
Counter-Fraud Commissioner to recover public funds from companies that took unfair advantage during the pandemic as well as confirming a chair of the Office for
Value for Money.

b) Working to eliminate fraud and error in the welfare system with the biggest welfare
fraud and error budget package in recent history, saving £3.5 billion in 2029-30.

c) Closing the tax gap and ensuring that everyone is paying the tax that they owe by
making the largest single investment in HMRC systems to close the tax gap, raising £6.5 billion in 2029-30.

Supporting people with the cost of living – for working people up and down the country by:

a) Increasing the National Living Wage to allow for an increase of 6.7% to £12.21 per
hour for full time workers on the NLW – worth up to £1,400 for a full-time worker.

b) Providing £1 billion to extend the Household Support Fund and Discretionary Housing Payments.

c) Preserving the State Pension Triple Lock which will see the basic and new State
Pension and Pension Credit’s standard minimum guarantee uprated by 4.1% with over 12 million pensioners gaining up to £475 next year.

d) Reducing the cap on deductions from Universal Credit to repay debts from 25% to
15% of the standard allowance from April 2025.

e) Increasing the carers allowance weekly earnings limit to allow them to work more
hours before losing their entitlement.

Protecting working people from higher taxes in their payslips by:

a) Not extending the freeze to income tax and National Insurance contributions
thresholds. From April 2028, these personal tax thresholds will be uprated in line with
inflation.

b) Maintaining the fuel duty freeze and temporary 5p cut for 25-26.

c) Delivering on the commitment to not increase taxes on working people, which is why we are not increasing the basic, higher or additional rates of Income Tax, employee National Insurance contributions or VAT. Working people will not see higher taxes in their payslips as a result of the choices made in the Budget.

Raising revenue to fund public services and to restore economic stability

The burden of tax has too often fallen on working people. Under Labour, larger businesses and the richest will pay a little more in tax to help fund our public services such as the NHS.

Part of making no return to the austerity and instability of the past means taking the difficult but right choices to increase the rate of Employer National Insurance Contributions by 1.2 percentage points to 15% and reducing the Secondary Threshold from £9,100 to £5,000 per year.

In making this choice, the government is also choosing to protect small businesses by increasing the Employment Allowance to £10,500 and expanding this to all eligible employers.

Changes to the Employment Allowance means that the OBR expects 250,000 employers to gain from these changes and an additional 820,000 will see no change.

Delivering a fairer, more sustainable tax system: whilst ensuring the government raises the revenue required to fund public services, the government is taking a balanced approach that creates a fairer system, whilst still promoting entrepreneurship, growth and wealth creation.

Therefore the government is:

a) Taking a balanced approach to adjusting the rate of Capital Gains tax, a tax paid by fewer than 1% of adults each year. The rate will change from 10% to 18% on the lower rate and 20% to 24% on the higher. Whilst rates have increased, in order to take a balanced approach and support entrepreneurship, the government has chosen to maintain the UK’s position as having the lowest Capital Gains Tax of any European G7 economy, with no changes to CGT rates on property or the Annual Exempt Allowance, and with a phased increase to Business Asset Disposal Relief to give entrepreneurs time to adjust.

b) Making the inheritance tax system fairer and taking an approach that considers
the strongly held-desire to pass down savings to children and grandchildren: by
keeping inheritance tax thresholds at existing levels until 6 April 2030, and bringing
unused pension funds and death benefits payable from a pension into the scope of
inheritance tax, making their treatment consistent with other products, such as ISAs.

c) Continuing to protect small family owned farms and businesses through Agricultural Property Relief (APR) and Business Property Relief (BPR) through a reduced rate of 50% relief on BPR and 50% relief over a threshold of £1m on APR.

d) Renewing the tobacco duty escalator to incentivise giving up smoking, introducing a flat-rate excise duty on vaping liquid and equivalent one-off increase in Tobacco duty from 2026, and increasing the Soft Drinks Industry Levy over the forecast period in line with inflation since it was introduced in 2018.

e) Supporting the take up of electric vehicles by maintaining incentives for electric
vehicles in Company Car Tax from 2028 and increasing the differential between fully
electric and other vehicles in the first year rates of Vehicle Excise Duty from April 2025.

f) Introducing an adjustment to Air Passenger Duty that will mean an increase of no
more than £2 on the price of an economy short haul flight but increasing the rate to 50% for private jets.

g) Making Business rates in England fairer to protect the high street: The government
will introduce permanently lower tax rates for retail, hospitality, and leisure (RHL)
properties with rateable values less than £500,000, alongside 40% relief next year for
RHL properties up to a cash cap of £110,000 per business. We are also freezing the small business multiplier for one year to protect over a million small properties from
inflationary bill increases.

h) To recognise the economic and cultural importance of British pubs, and
commitment to supporting smaller brewers, the government is cutting alcohol duty on draught products from February next year, reducing it by 1 penny per pint. Alcohol duty on non-draught products will increase in line with Retail Price Index (RPI) from the same date.

i) Providing certainty to businesses on tax going forwards by publishing the corporate
tax roadmap and confirming the commitment to cap Corporation Tax at 25% – the
lowest in the G7 – for the duration of this parliament.

Delivering previous tax commitments- which overall raise £9 billion per year by the end of the forecast to support public services:

a) If you make Britain your home, you should pay your tax here. So the government is
abolishing the non-dom tax loopholes. These measures raise £12.7 billion over the
forecast period.

b) Reforming Stamp Duty Land Tax so those who buy second homes pay 2 percentage points more than before. This will support 130,000 additional people to buy their first home.

c) Increasing, extending and reforming the Energy Profits levy on oil and gas companies.

d) Ending VAT exemption and business rates relief provided to private schools.

Fixing the NHS and reforming public services – The government is rejecting the return to austerity set out in the previous government’s spending plans.

To deliver change the government is:

• Providing an extra c£25.6billion over two years for the NHS, across resource and
capital budgets, in order to:

• Cut NHS waiting times with 40,000 extra elective appointments a week, and make progress towards the commitment that patients should expect to wait no longer than 18 weeks from referral to consultant-led treatment
• Build capacity for more than 30,000 additional procedures, over 1.25 million diagnostics tests through new surgical hubs and diagnostic scanners, alongside
  additional beds to help bring waiting lists down, reduce waiting times, and shift
  more care into the community.

• Invest more than £2 billion in NHS technology and digital to run essential services and drive NHS productivity improvements, to free up staff time, ensure all Trusts have
Electronic Patient Records, improve cyber security and enhance patient access through the NHS App. In implementing the settlement, DHSC (including the NHS) will deliver 2% productivity next year. Begin a process of lasting change across our public services, including:

• Further supporting the recruitment of 6,500 new teachers by increasing the Core Schools Budget by 2.3bn next year to help students get the skills they need for the future, getting more teachers into key shortage subjects and tackling retention issues.
• Supporting frontline policing levels across the country and putting the government on track to start to deliver the pledge to boost visible neighbourhood policing with 13,000 more neighbourhood officers and PCSOs.

This will be paid for by tackling waste through police efficiencies, enabling officers
to spend more time on the frontline tackling crime.

• Securing the UK’s borders, by establishing a new Border Security Command with funding in 2024-25 and 2025-26 to tackle organised criminal gangs by reducing the flow of irregular migration toward the UK and safeguarding victims of trafficking.
• Delivering a real-terms funding increase for local government spending power next year, including £1.3bn of additional grant funding to support local government deliver its essential services. Providing the devolved governments with an additional £6.6 billion through the operation of the Barnett formula in 2025-26. This includes £3.4 billion for the Scottish Government, £1.7 billion for the Welsh Government and £1.5 billion for the Northern Ireland Executive.
• Providing the devolved governments with an additional £6.6 billion through theoperation of the Barnett formula in 2025-26. This includes £3.4 billion for the Scottish Government, £1.7 billion for the Welsh Government and £1.5 billion for the Northern Ireland Executive.
• A 2.7% real terms increase of the Ministry of Defence’s budget, ensuring the UK comfortably exceeds the NATO spending target of 2% of GDP.

 

Rebuilding Britain – through the growth mission, the government is restoring stability, increasing investment and reforming the economy to drive up prosperity and living standards

across the UK. The Budget sets out what the government is doing to boost growth across the seven pillars of the growth mission: (1) economic and fiscal stability; (2) investment, infrastructure and planning; (3) place; (4) people: skills and workforce; (5) industrial strategy and trade; (6) innovation; (7) net zero and clean energy.

To drive forward the growth mission, the government is boosting public investment across the next five years by over £100 billion. This includes:

a) Backing innovation. Investing £20.4 billion into in Research & Development, in 25-26.

b) Getting Britain moving. Going beyond the manifesto commitment to fix an additional 1 million potholes per year and providing a £500m cash increase on 2024-25 local roads maintenance baseline funding; providing an additional £200 million for local transport through City Region Sustainable Transport Settlements (CRSTS) bringing total local transport spending for Metro Mayors in 2025-26 to £1.3bn; providing over £650m of funding for local transport beyond CRSTS; and delivering high- growth transport infrastructure projects including HS2 between Birmingham and London, the Transpennine Route Upgrade, and East West Rail. The Budget also provides much needed certainty by confirming that HS2 trains will go to Euston and we are committing the funding required to begin tunnelling works to the central London terminus.

c) Building more homes to unblock barriers to growth. Adding £500 million to the
Affordable Homes Programme next year to kickstart progress towards 1.5 million
homes over this Parliament.

d) Supporting sectors that will drive the next industrial revolution, by removing barriers to growth for priority sectors, including clean energy, by investing:

a. £975m for the aerospace sector over 5 years to fund vital research and
development for the latest aerospace technology.

b. Over £2 billion over 5 years to support the automotive sector including the
electric vehicle manufacturing sector and supply chain, providing the long-term
certainty that industry need to invest in advanced, greener technologies.

c. In kickstarting Great British Energy, headquartered in Aberdeen, as part of the
Government’s mission to make Britain a clean energy superpower and to support
our industrial strategy.

e) But, the government cannot tax and spend its way to long-term growth. The
lifeblood of a growing economy is business investment. That is why the government has already started work to break down the barriers to investment:

f) including major reforms of the planning system to get Britain building again

g) around the International Investment Summit, the government secured £63 billion in
investment for the UK economy, and the government’s new National Wealth Fund will
invest alongside business in the jobs, industries and infrastructure of the future.

h) the government is also developing a new Trade Strategy to support the commitment to net zero and enhance economic security. Free Trade Agreements are one important lever, and the government has already commenced talks with the Gulf Co-operation Council.

i) helping small businesses through Start Up Loans, Made Smarter and Growth Hubs.

j) and next year will publish a new Industrial Strategy setting out high growth sectors
where the UK has real competitive advantage.

k) Whilst taking these measures, the government is aware that global developments
continue to pose risks to the outlook for growth and inflation. Any significant escalations that lead to disruptions to energy and goods trade, particularly from the Middle East, could contribute to higher oil prices and increased shipping costs with economic impacts.