“There will be no return to austerity” - Autumn Budget highlights and New Forest reactions
Rachel Reeves has delivered her first budget as Chancellor of the Exchequer, and the Labour Party’s first in over 14 years, to Parliament today.
Government communications affirmed this autumn budget will “fix the foundations to deliver change by fixing the NHS and rebuilding Britain, while ensuring working people don’t face higher taxes in their payslips”.
She declared: “I say to working people, I will not increase your VAT, I will not increase your income tax, I will not increase your National Insurance.”
In the week leading up to this budget, the Chancellor revealed a £240m “cash-injection to accelerate the rollout of local services” with the aim of getting people back into work and “drive down inactivity”.
Reports state that the UK is the only G7 country with higher economic inactivity now than prior to the Covid pandemic with 2.8m people out of work due to long-term sickness.
The Government believes this is “holding back productivity and stunting growth”.
“I say to working people, I will not increase your VAT, I will not increase your income tax, I will not increase your National Insurance.”
Chancellor Rachel Reeves
A day prior to the budget statement, the Chancellor announced a 6.7% rise in the National Living Wage impacting three million workers next year. This could mean a £1,400 pay rise for an eligible full-time worker.
Deputy Prime Minister Angela Raynor said: “Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18–20-year-olds on record.”
A promise to deliver an additional 40,000 elective NHS appointments each week was also announced prior to the autumn budget by the Chancellor and Health Secretary, Wes Streeting MP.
In a social media post prior to arriving at the House of Commons, Reeves shared a photo with the message, “A Budget to fix the foundations and deliver change”.
Announcements impacting businesses
Employers National Insurance contribution will rise 1.2%, going up to 15%, from April 2025.
The threshold at which businesses start paying National Insurance on employees' wages will be lowered from £9,100 to £5,000. Reeves says this will raise £25bn.
Employment allowance is rising from £5,000 to £10,500. This means 865,000 employers now won't pay any National Insurance next year.
This will allow a small business to employ four full-time workers on the national living wage without paying any National Insurance contributions.
Former Prime Minister Rishi Sunak reacting to the budget claimed, “this is what happens when people with no experience of business lead the government” and added Labour have delivered a “tidal wave” of anti-business measures.
“This is what happens when people with no experience of business lead the government”
Former Prime Minister Rishi Sunak
An anonymous small business owner said: “I was expecting a huge rise in taxes for myself and my employees, so whilst the National Insurance rates will rise, this fortunately will not apply to my business.”
Another business shared, “I own a micro business and am desperate to grow but cannot do this without hiring people. Not having additional costs is definitely intriguing and perhaps could help me hire my first few team members.”
Other key highlights from the Autumn Budget 2024;
This budget will raise £40bn worth of taxes
No change to income tax or VAT
Income tax freeze to end in 2028
Self-employed national insurance not to rise
An increase in the national living wage of 6.7%
Support to stop shoplifting within retail
Benefits will rise in line with inflation by 1.7% in April 2025
Freeze on fuel duty
Carers can now earn more money without losing their Carer’s Allowance
Schools funded £2.3bn next year
Stamp duty on additional homes up from 3% to 5% starting 31 October
Buses will keep lower fares, although changing from £2 a journey to £3
With a stamp duty surcharge on additional homes increasing from 3% to 5% the day after the budget, landlords and private renters are “worried”.
Local landlord, Pam, said: “It is already too hard to keep rental fees down for tenants and with rising costs, it just isn’t financially viable to continue to buy property and be a landlord anymore”.
Private renter, Isabelle, has faced rising rent costs for two years and is “desperate” for the industry to “settle down” and allow her to “finally afford the rent”.
“There will be no return to austerity”
Chancellor Rachel Reeves
A New Forest resident currently receiving benefits who wished to remain anonymous said: “I was secretly hoping Universal Credit would go up a little more than inflation.
“I am disabled, and the Cost-of-Living Crisis has hit me hard with rising costs of food, heating, mobility aids etc. But a small rise is better than no rise at all, so I am grateful for that.”
Hythe councillor shares reactions
Cllr Alex Wade, Liberal Democrats representative for Hythe Central, said: “A rise in minimum wage is hugely welcome for New Forest Residents, many who earn below average national wages and have been impacted by the cost-of-living crisis.
“However, how will small and medium businesses deal with this change if the Government won't offer any support for these valuable mainly independent businesses who are already struggling with existing costs”
Wade welcomes the freeze on fuel duty for residents and businesses as so many rely on cars within the district due to the limited available public transport.
He continued: “Freezing fuel duty is especially important for small and independent businesses who rely on delivering their products and will be impacted by a rise in national insurance contributions, drop in threshold of paying and minimum wage rise.”
“Restore economic stability and protect working people”
Chancellor Rachel Reeves
"There are some positives for local Residents and businesses at least with the cut to the duty on draft alcohol which will benefit New Forest's amazing pubs.
“The windfall, stamp duty on second homes and capital gains taxes are all changes I welcome, alongside sensible rises on air passenger duty targeting private jets.
“These changes will bring in funds to hopefully support much needed public services spending such as on the NHS and Social Care.”
Wade believes businesses have been targeted “quite heavily” and changes in the business rates discount may “cause some concern”.
"The 5bn for Housing is much needed, but how much will be shared with New Forest District Council and support affordable homes for New Forest families.
Other than a small rise in bus fares, there is little news for New Forest residents on transport. Wade saw “no railway plans or support for Ferry services and no mention of plans for funding for rural bus routes.”
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