In a landmark fiscal announcement, Labour’s Chancellor Rachel Reeves has unveiled a transformative budget featuring £40 billion in tax increases, marking a significant departure from previous Conservative policies. The comprehensive package includes substantial reforms to national insurance, capital gains tax, and the controversial non-dom regime.
The Office for Budget Responsibility forecasts modest economic growth of 1.1 per cent this year, rising to 2 per cent in 2025. Inflation is projected to stabilise at 2.5 per cent, offering some relief to British households grappling with cost-of-living pressures.
Business leaders face heightened costs as employer national insurance contributions rise to 15 per cent from April 2025. The earnings threshold for these contributions has been lowered dramatically to £5,000, potentially impacting employment decisions across the private sector.
The abolition of the non-dom tax regime represents a pivotal shift in British fiscal policy, eliminating preferential treatment for foreign nationals residing in the UK. This measure, combined with increased capital gains tax rates of 24 per cent on asset sales, signals a robust approach to wealth taxation.
Social spending features prominently in the budget, with £22.6 billion allocated to the NHS and significant investments in education, including £2.3 billion for core schools funding. The national living wage will increase by 6.7 per cent to £12.21 per hour, benefiting millions of workers.
Environmental initiatives receive substantial backing through a £3.4 billion investment in home insulation programmes, while defence spending increases by £2.9 billion. The budget also maintains some popular Conservative policies, including the fuel duty freeze and modest reductions in draught beer duty.
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