The UK’s first ever female Chancellor Rachel Reeves has delivered the first Labour Party budget in nearly fifteen years
Reeves began by saying
‘I am deeply proud to be Britain’s first ever female Chancellor of the Exchequer. For girls and young women everywhere I say let there be no ceiling on your ambition, your hopes, your dreams’ and reminded MP’s that this was not the first time that it has fallen to Labour to rebuild Britain.
In 1945, it was Labour that rebuilt our country out of the rubble of the Second World War.
In 1964, it was Labour that rebuilt Britain with the white heat of technology. And in 1997, it was the Labour that rebuilt our schools and hospitals.
Reeves accused the Conservative Party of having “failed our country” – citing austerity, the Brexit withdrawal deal and the mini-budget as indicators of this failure.
Reeves quoted from OBR review into claims of £22billion black hole in public finances
‘They say the previous government did not provide all the information… had they known about the undisclosed pressures then their spring budget forecast would have been materially different’
But now to the detail
She began by announcing a fund of £11.8bn for infected blood victims and £1.8bn for Post Office victims
The budget she said will raise £40 billion in tax revenue making it the biggest budget ever and The balanced current budget rule is now a 3-year rolling target instead of a 5-year rolling target
The Chancellor confirmed that the National Living range “I can confirm that we will accept the low pay commission recommendation to increase the national living wage by 6.7%.”
Carers can now earn more than £10,000 a year before losing carer’s allowance. She says there will also be reforms to the cliff edge withdrawal of the allowance.
While Reeves didn’t withdraw the two child limit on universal credit but she reduces debt repayments that are deducted from Universal Credit from 25% to 15% of standard allowance
This she said will help 1.2m low income household – with an average gain of £420 per family
Meanwhile the State pension will rise by £475 under triple lock
Reeves announced that she will will stick with “temporary” 5p cut on fuel duty for another year and also with decade-long freeze on inflationary rises
The Chancellor announces 1.2% increase in employers’ NI and the rate at which the threshold at which companies start making contributions decreases from£9,100 to £5,000-The tax rise is worth £25billion
The main rate of capital gains tax rate will rise from 20% to 24% while the lower rate rises from 10% to 18%
Inherited pensions will be brought into inheritance tax calculations while the Personal threshold freeze(£325,000 or £500,000 with house) is extended to 2030 from the previous Government’s 2028.
The Non-dom tax status is to be axed from April 2025 with a new residency scheme for those in UK temporarily.Reeves says this will raise £12.7bn over five years
Stamp duty on buying second homes will rise by 2 percentage points
Income tax thresholds will be unfrozen in 2028 and will then rise in line with inflation
Draught duty on alcoholic drinks will fall by 1.7%, meaning “a penny off a pint in the pub”,
Corporation tax will be capped at 25% for the duration of the Parliament
The Chancellor has confirmed the 20% VAT on private school fees kicks in from January
On investment Reeves told the Commons “In Washington last week, the International Monetary Fund were clear – more investment is badly needed.”
We will improve certainty by setting capital budgets every five years and extending them at every spending review,” Reeves announces.
“These fiscal rules will ensure that our public finances are on a firm footing while enabling us to invest prudently.”
Reeves announced £5bn into housing, £1bn into aerospace,£2bn into automotive sector
and £520m for life sciences as well as
£2.9bn into defence, £2.3bn into core school budgets and £650m into local transport to improve connections across country
