Autumn Budget 2024 | Main takeaways
Chancellor Rachel Reeves has announced her keenly awaited economic plans to the nation, reiterating her desire for more public investment and committing to heavily rumoured tax rises worth £40bn.
She also highlighted her intention to reduce reliance on borrowing, targeting a fall from 4.5% to 2.5% of GDP this year.
The key theme of Reeves’ speech was one of cautious renewal, with references to her predecessors’ economic mismanagement acting as a buffer for her difficult decisions.
Government investment in housing
Reeves committed to £5bn of government investment into housing, including the teased £500m boost to the Affordable Homes Programme. The clogged-up planning system will see £46m of additional funding to support recruitment into local planning authorities.
Schools funding
The Chancellor allocated £1.4bn to rebuilding schools, a £550m increase on this year, with plans for 100 projects to begin delivery in England over the next year, and 518 schools in total through the programme. A £2.3bn rise in the core schools budget will pay for the recruitment of 6,500 teachers. A previously touted commitment to introduce VAT on private schools was also carried through and will start from 1 January 2025.
Debate the Budget’s impact on the North at Place North Question Time | 5 November
Skills England
A new programme aimed at improving educational outputs and occupational mobility while addressing skills challenges holding back some sectors. Skills England’s main priority will be to ensure a highly trained workforce is provided to grow the economy into the future.
NHS Hospital Programme
A £22.6bn increase in day-to-day NHS spending as well as an increase of £3.1bn to provide capital investment in health was announced. Reeves also committed £1.5bn for new surgical hubs and diagnostics scanners. Objectives to improve productivity using technology will see a £2bn investment aiming to free up staff time and improve record keeping.
Key sector funding
Specific industries, earmarked by the Chancellor as key to the longevity of the UK economic success, have been granted long-term funding as part of the Industrial Strategy. The aerospace sector, which has a strong regional presence in the North West of England will see £975m in funding. £2bn over five years will support the automotive sector driving growth in areas such as the North East. A further £520m
will be allocated for a Life Sciences Innovative Manufacturing Fund.
Transport
Increased investment into local transport in the form of £200m for City Region Sustainable Transport Settlements which would bring local transport spending for Metro Mayors in 2025-26 to £1.3bn. Reeves committed to delivering the TransPennine Route Upgrade between York and Manchester, as well as pressing on with the Northern Powerhouse Rail plans. Funding to the tune of £650m for local transport in regions outside of combined authorities was also confirmed.
Capital Gains Tax
Reeves announced an increase in both the lower rate and higher rate of capital gains tax. The lower rate will rise from 10% to 18%, the higher rate will increase from 20% to 24%. The chancellor promises this will keep the UK tax system internationally competitive, with lower rates than comparable EU countries.
Business rates
The government will reduce from 75% to 40% business rates relief for retail, hospitality, and leisure sectors. In addition, for the next fiscal year, the small business multiplier in England will be frozen. The standard multiplier will be uprated by the September 2024 CPI rate to 55.5p.
Stamp Duty
To come into effect imminently, Stamp Duty will be increased by 2 percentage points from 3% to 5%. The aim of this policy is to provide first time buyers with a comparative advantage to second home buyers, landlords and businesses purchasing commercial property.
Green energy
An allocation of £8bn for carbon capture projects and carbon storage infrastructure was given. Reeves stated that the UK had already secured £34.8bn of private investment into the UK’s clean energy sector at the International Investment Summit. GB Energy, based from Aberdeen, was given £125m in funding. £2.7bn will be reserved for Sizewell C’s continuing development through 2025-26.