Chancellor Rachel Reeves laid out her plans to rebuild Britain once more, as she set out Labour’s policies to repair public services, help those struggling to make ends meet and repair the economy.
Today was a day many in the Labour Party had been waiting for. Labour’s first budget in 14 years and the first ever delivered by a female Chancellor.
Following 14 years of stagnant wages, falling living standards and poor productivity, after the Tories took a wrecking ball to the economy, today was the day that the Labour government set out its plans to repair public finances, grow the economy and deliver for working people.
Chancellor Rachel Reeves laid out her plans to rebuild Britain once more, as she set out Labour’s policies to repair public services, help those struggling to make ends meet and repair the economy. So, what are the key takeaways from Reeves’ budget? We take a look at five of them below:
1.Labour gives a pay boost to millions of working people with a 6.7% rise in minimum wage
The Labour government has announced a pay boost for millions of working people with a 6.7% rise in the minimum wage. The minimum wage will rise to £12.21 an hour next year.
The minimum wage for over 21s, known officially as the National Living Wage, will rise from £11.44 to £12.21 from April 2025. For someone working full time, or a 37.5 hour week, that equates to £23,873.60 a year, up from £22,368.06.
For 18 to 20-year-olds, the minimum wage will rise from £8.60 to £10. This means someone on a 37.5 hour week would earn £19,552 a year, up from £16,815.
Apprentices will also benefit, with their pay rising from £6.40 to £7.55 an hour.
As a result of the increase in the minimum wage, more than 3 million low-paid workers are in line for a pay rise.
2. Compensation schemes for the victims of the infected blood and Post Office Horizon IT scandals
The Chancellor also announced funding for compensation schemes for victims of the infected blood and post office scandals, announcing £11.8bn for victims of infected blood scandal and their families, and £1.8bn for victims of Post Office Horizon scandal.
Reeves argued that while the last government had apologised for the infected blood scandal, it had failed to budget at all for compensation payments.
3. NHS budget increases
After more than a decade of being neglected by the Tories, Reeves also announced a £22.6bn increase in the day-to-day health budget, and £3.1bn increase in the capital budget. That includes £1bn for repairs and upgrades and £1.5bn for new beds in hospitals and testing capacity. She said: “This is the largest real terms growth in day to day NHS spending outside of Covid since 2010.”
4. More money for schools and education
The budget for free school breakfast clubs will be tripled to £30m, in 2025 and 2026. The core budget for schools will also rise by £2.3bn next year.
Reeves also announced that there will be a £6.7bn increase in capital funding for school building.
5. Capital gains and inheritance tax changes
Rachel Reeves also announced changes to capital gains and inheritance tax. Capital Gains tax will be increased. The lower rate will be raised from 10% to 18%, while the higher rate will rise from 20% to 24%.
The government will extend a freeze on the threshold for inheritance tax, allowing £325,000 to be inherited tax free.
There will be tax raises worth £2bn from reforming reliefs for business and agricultural assets. After £1m, those assets will attract inheritance tax of 20%.
Basit Mahmood is editor of Left Foot Forward
To reach hundreds of thousands of new readers we need to grow our donor base substantially.
That's why in 2024, we are seeking to generate 150 additional regular donors to support Left Foot Forward's work.
We still need another 117 people to donate to hit the target. You can help. Donate today.