Autumn Budget 2024: What was announced by Rachel Reeves? Main measures including tax, NHS
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The Chancellor took to the box to share the first budget of the new Labour government with MPs, with pressure to deliver on areas such as health, tax and education. While some measure had already been reported, there are some measures that remains under wraps until the moment she took to the box.
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Hide AdMs Reeves told the Commons: “This is a moment of fundamental choice for Britain. I have made my choices.
“The responsible choices: to restore stability to our country, to protect working people, more teachers in our schools, more appointments in our NHS, more homes being built, fixing the foundations of our economy, investing in our future, delivering change, rebuilding Britain.”
Tax
Capital gains tax are set to increase. The lower rate will rise from 10% to 18%, with the higher rate rising from 20% to 40%.
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Hide AdEmployers’ national insurance contributions will increase by 1.2 percentage points to 15% from April 2025. The threshold for employers paying national insurance contributions will fall from £9,100 to £5,000.
Stamp duty land surcharge for second-homes is set to increase by 2% to 5%. The adjustment is set to come in from tomorrow (October 31). Windfall tax on oil and gas profits will be increased to 38% and will now expire in March 2030.
Fuel duty will remain frozen at the existing 5p cut, despite reports that fuel duty could be set for an increase, The Chancellor stated in her budget statement that increasing this would “be the wrong choice”. Alcohol duty will fall by 1.7%. The Chancellor has said that this will mean “a penny off a pint in the pub”.
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Hide AdWhile the disposable vape ban is set to be introduced next year, a tax on vapes will be introduced in the UK in 2026. A flat duty rate of£2.20 per 10ml of liquid will come into force on October 1, 2026.
There will be no increases for “working people” on income tax, VAT and national insurance. But the Chancellor said that “personal tax thresholds will be uprated in line with inflation once again” in 2028-29.
Health
Reeves said £1 billion will go to upgrading NHS buildings which are in “disrepair”, and £1.5 billion will go towards new hospital beds. She added that the day-to-day health budget will increase to £22.6 billion, with the Chancellor telling MPs: “This is the largest real-terms growth in day-to-day NHS spending outside of Covid since 2010.”
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Hide AdThe Chancellor added: “Because of this record injection of funding, because of the thousands of additional beds that we have secured and because of the reforms that we are delivering in our NHS, we can now begin to bring waiting lists down more quickly and move towards our target for waiting times no longer than 18 weeks, by delivering our manifesto commitment for 40,000 extra hospital appointments a week.”
Education
Private schools will no longer be exempt from VAT from January 2025, with legislation due to be introduced to remove business rate relief from private schools from April 2025.
Investment will be made in school breakfast clubs, and the core schools budget will increase to £2.3b while £300m has been budgeted towards further education.
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Hide AdReeves added that money will be given to improve “crumbling” school buildings, saying: “I am providing £6.7 billion of capital investment to the Department for Education next year – a 19% real-terms increase on this year. That includes £1.4 billion to rebuild over 500 schools in the greatest need, including St Helen’s Primary School in Hartlepool and Mercia Academy in Derby and so many more across our country.
“And we will provide £2.1 billion more to improve school maintenance, £300 million more than this year – ensuring that all our children can learn somewhere safe, including dealing with RAAC affected schools in the constituencies of the MPs for Watford, Stourbridge, Hyndburn, and beyond.”
Housing
The Chancellor announced that there would be investment in affordable housing. The Affordable Homes Programme will increase to £3.1 billion, in a bid to deliver thousands of new homes.
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Hide AdAn additional £3 billion has been pledged to to boost the supply of homes and support smaller housebuilders. She added that £1b of investment will be used to remove dangerous cladding following the Grenfell Inquiry report.
Environment
11 new green hydrogen projects across England, Scotland and Wales have been announced as well as the formation of the previously announced GB Energy.
The government will also invest an initial £3.4bn to “kick-start” the Warm Homes Plan in a bid to “transform 350,000 homes, including a quarter-of-a-million low-income and social homes”.
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The Transpennine railway route between York, Leeds, Huddersfield and Manchester will be upgraded as part of Reeves’ budget. The Chancellor continued: “We will deliver East-West Rail to drive growth between Oxford, Milton Keynes and Cambridge, with the first services running between Oxford, Bletchley and Milton Keynes next year and trains between Oxford and Bedford running by 2030.
“We are delivering railway schemes which improve journeys for people across our country, including upgrades at Bradford Forster Square, improving capacity at Manchester Victoria, and electrifying the Wigan-Bolton line.”
There were also commitments to “get a grip” of the doomed HS2 project, with money budgets for the building of a new tunnel between London Euston and a new station in west London.
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Hide AdThe Chancellor also made promises to fix the nation’s potholes in her budget, saying: “For too long, potholes have been an all too visible reminder of our failure to invest as a nation. Today, that changes, with a £500 million increase in road maintenance budgets next year, more than delivering on our manifesto commitment to fix an additional one million potholes per year.”
Technology and Culture
£500 million will be spent on improving broadband connectivity across the country. The Chancellor also pledge funds for creative industries.
She said: “For our world-leading creative industries, we will legislate to provide additional tax relief for visual effect costs in film and TV, and we are providing £25 million for the North East Combined Authority, which they plan to use to remediate the Crown Works Studio site in Sunderland, creating 8,000 new jobs.”
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Hide AdReeves added that there would be funding into science industries adding: “To unlock these growth industries of the future, we will protect Government investment in research and development with more than £20 billion of funding. This includes at least £6.1 billion to protect core research funding for areas like engineering, biotechnology and medical science, through Research England, other research councils, and the national academies.
“We will extend the Innovation Accelerators programme in Glasgow, in Manchester and in the West Midlands. And with over £500 million of funding next year, the Science, Technology and Innovation Secretary (Peter Kyle), will continue to drive progress in improving fast, reliable broadband and mobile coverage across our country, including in rural areas.”
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