Key events
Reeves says, in line with the Barnett formula, there will be an extra £3.4bn for the Scottish government, an extra £1.7bn for the Welsh government and an extra £1.5bn for Northern Ireland.
And the Welsh government is getting £25m to help fund the maintenance of coal tips, she says.
Reeves confirms MoD spending is going up by £2.9bn.
There will be another £2m for Holocaust education, she says.
And there will be an extra £1.3bn for councils, including at least £600m for social care and £230m to to tackle homelessness and rough sleeping.
Reeves announces £1bn increase in special educational needs funding
Reeves says she is tripling investment in breakfast clubs.
And she announces a £1bn uplift in special educational needs funding – an increase of 6% year on year, she says.
Reeves is now talking about spending.
She says day-to-day government spending will rise by 1.5%.
And spending including capital spending will rise by 1.7% in real terms, she says.
At the election, we promised there would be no return to austerity today, we deliver on that promise.
Reeves says freeze in income tax and national insurance thresholds will not be extended, contrary to some pre-budget reports
There was speculation that Reeves would extend the freeze on income tax and national insurance thresholds put in place by the last government. But Reeves has decided not to, she says.
The previous government froze income tax and National Insurance thresholds in 2021 and then they did so again, after the mini budget, extending their threshold freeze for a further two years …
Having considered this issue closely, I have come to the conclusion that extending the threshold freeze would hurt working people would take more money out of their pay slips. I am keeping every single promise on tax that I made in our manifesto. There will be no extension of the freeze in income tax and national insurance thresholds beyond the decisions by the previous government.
From 2028-29, personal tax thresholds will be uprated in line with inflation once again.
Blick Rothenberg, the audit, tax and business advisory firm, point out that Rachel Reeves has announced the largest tax-raising budget in decades.
Simon Gleeson, a partner at Blick Rothenberg, says:
“£40bn in tax raises is the largest any chancellor has made since Norman Lamont in 1993, at £38.5bn (Conservatives), and Dennis Healy at £31.4bn in 1975 (Labour).”
The key measure is tax as a share of the economy:
According to @TheIFS, a £40bn tax rise officially confirms this as the second biggest tax-rising Budget on record – 1.25% of GDP by 2028/9 vs 1.4% in 1991 (h/t @BenZaranko)
*May change depending on projected size of GDP in 2028/9 in new OBR figures. pic.twitter.com/OAoELNBDzY
— Robert Colvile (@rcolvile) October 30, 2024
Reeves confirms VAT on private school fees will go ahead.
Every child should have access to a high-quality education.
From 1 Jan 2025, VAT will apply to all education, training and boarding services provided by private schools.
This money will help us to invest more in state education, improving standards and opportunities for all. pic.twitter.com/bqrZFedyHO
— HM Treasury (@hmtreasury) October 30, 2024
To help high streets, Reeves says there will be 40% relief on business rates for the retail, hospitality and leisure industry in 2025-26, up to a cap of £110,000 per business.
The small business tax multiplier will be frozen next year. And permanently lower tax rates will be introduced for retail, hospitality & leisure properties from 2026-27.
We’re protecting our high streets.
From 2026-27 permanently lower tax rates will be introduced for retail, hospitality & leisure (RHL) properties.
Plus, for 2025-26, 250,000 RHL properties will receive 40% relief on their bills, up to a cash cap of £110,000 per business. pic.twitter.com/OWSplc4YJc
— HM Treasury (@hmtreasury) October 30, 2024
And she says she is cutting the duty on draft alcoholic drinks by 1.7 percentage points.
Reeves says the government is going ahead with the pledge to abolish non-dom status.
Those that make the UK their home should pay their taxes here.
That is why we are removing domicile status from the tax system from 6 April 2025 & creating a simpler residence based regime, designed to bring the best talent & investment to the UK. pic.twitter.com/RXlNkZApUF
— HM Treasury (@hmtreasury) October 30, 2024
Reeves announces 50% increase in air passenger duty for private jets
Reeves turns to air passenger duty.
There will be a small adjustment, worth no more than £2 for economy, short-haul flights.
But there will be a different approach for private jets. Their air passenger duty will rise by 50%, she says.
Making a joke about Rishi Sunak, she says this would be the equivalent of £450 per passenger for a flight to California.
Reeves announces a new tax on vapes.
We want to discourage non-smokers & young people from taking up vaping.
From 1 Oct 2026, we’re introducing a vaping duty for the first time at £2.20 per 10ml of liquid.
Plus a one-off tobacco duty rise to keep the incentive to choose refillable vaping over smoking. pic.twitter.com/yxzOHYlA1E
— HM Treasury (@hmtreasury) October 30, 2024
