With economists and analysts still digesting Labour’s first budget in 14 years, one thing is becoming increasingly clear, those on lower incomes stand to benefit the most while the wealthiest households will pay the most.

Chancellor Rachel Reeves set out plans yesterday to get Britain’s economy growing again, investing in public services which had been neglected under the Tories.

Labour announced a 6.7% hike in the minimum wage, which will benefit millions of low-paid workers, while the budget also saw a £22bn increase in the day-to-day budget of the NHS. Other measures included committing to the largest increase in Carers allowance since it was introduced in 1976, more money for our schools and compensation for the victims of the infected blood and Post Office Horizon IT scandals.

While right-wing papers bemoaned tax rises, which include changes to capital gains and inheritance tax, a chart produced by the Treasury shows how the poorest households stand to gain most from the policies contained in the budget, while the wealthiest households will pay the most.

Analysis of the policies in the Treasury impact assessment report states: “Increases in spending on public services, such as health and education, benefit households on lower incomes the most. The distributional analysis published alongside the Budget shows that on average, households in the lowest income deciles in 2025-26 will benefit most from the policy decisions as a percentage of net income and increases in tax will be concentrated on the highest income households. Overall, on average, all but the richest 10% of households will benefit as a percentage of income from policy decisions in 2025-26.”

Basit Mahmood is editor of Left Foot Forward

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