The Labour Budget update: A quick look at some of today’s announcements
Bob Bradley
?? Helping ACCIDENTAL business leaders to scale ADOLESCENT businesses. ??Businesses throwing tantrums at GROWTH pains and adult rules?? Leaders promoted for being good at what they did BEFORE?? Led 3 x ￡M+ businesses?
How will they impact you, your employees, your customers and your backers.
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The Budget was announced today. I’m sure lots will be analysing the details in the coming days, but in the meantime, here's a quick overview of some of the key announcements:
Cautions:
This note has been produced manually and very quickly to give business leaders that were not able to listen to the budget an early heads up.
Whilst it has been produced with without AI to hallucinate it has been produced very quickly and so may not be completely accurate.
Please regard it as an index highlighting the key points and investigate further what matters to you using both in the budget reports and the full documents that governments always issue alongside the speech.
Structural points / Fiscal rules
Stability rule : To ensure the current budget, in balance, by fifth year. From 2029 / 30 will then move to ensuring third year in budget.
New investment rule introduced to drive growth. Will add financial assets to the balance sheet to balance investment. Also in balance by fifth year. From 2029 / 30 will then move to ensure a third year in balance.
Plan is to capitalise ￡70Bn as National Wealth Fund. It will have to achieve a rate of return at least as good as gilts.?
Roles of Bank of England and MPC will be unchanged
OBR forecasts will in future be for next decade, not just five years
Appointing a Covid corruption commissioner to investigate
Creating a new office of Value for money
In spending review, immediate funding for day to day spending will be allowed to grow by 1.5% in real terms but all government departments will target 2% productivity savings
Will use technology to improve public services with zero based approach
Employment and retirement
Investing ￡240M on 16 projects to address NEETS through an integrated approach to health, education and welfare
Increasing National Living Wage Minimum wage 6.7% to ￡12.21
National Minimum Wage 18-20 by 16.3% to ￡10 ph
Carers allowance Weekly earnings limit up to ￡10,000
￡1Bn for Household support fund
Reducing impact of debt repayments on universal credit
Protection from unfair dismissal
Access to maternity and paternity leave improved
Retaining triple lock will cost ￡31Bn by 2029-30
State pension uprated by 4.1% next year
Countries and regions
Delegating more powers and funding to West Midlands and Manchester mayors
Increasing funding for Wales Scotland and Northern Ireland to address a number of specific issues
Real terms increase for local government ￡1.3Bn ￡200M for social care and ￡230M for homelessness
Taxes
Will increase overall to raise ￡40Bn
Will not extend freeze on Tax and NI thresholds. From 2028/29 will be updated in line with inflation.
No increase to NI Income tax VAT for working people (in their payslips)
Employers NI to rise from April. Rate increased by 1.2% to 15%. Reduction to secondary threshold from ￡9100 to ￡5000.? Will raise ￡25Bn.
Employment allowance increased from ￡5000 to ￡10,500
Capital gains tax up from 10% to 18% and on residential properly? from 18% - 24%
EIS and VCT extended to 2025
Inheritance tax Thresholds held from 2028 - 2030
Inherited pensions subject to IHT from 2027. Farm assets over ￡1M IHT at an effective rate of 20%. AIM shares will have IHT at 20%
Tobacco duty increased and escalator will be RPI + 2%. Tax introduced on vaping liquid
Soft drinks levy increased
Fuel duty frozen for next year
Will retain EV incentives. Air passenger duty unchanged on economy but on private jets increased by 50%
Business rates will be reduced by 40% for hotel and leisure but with a higher multiplier for most valuable properties
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Alcohol duty increased in line with RPI but draught beer duty reduced by 1.7%.
Will be publishing a corporate tax roadmap. Corporation tax will be fixed at 25% for duration of this parliament
Non dom tax regime abolished from April 2025
CGT on carried interest (for fund managers) raised to 32%
SDLT will be increased on second homes by 2% to 5%
Levy on Oil and Gas companies increased to 38%
Private schools will pay VAT from Jan 2025 and lose business rates relief
NHS
￡22.6Bn in health spend and ￡3.1Bn increase in capital investment
Plan for 2% productivity growth
Education
￡6.7Bn capital investment in schools
Tripling investment in breakfast clubs
Schools budget up by ￡2.3Bn
FE up by ￡300Mn
Extra ￡1Bn funding for SEN provision
Energy
Funding for eleven Green hydrogen projects
Green homes plan ￡3.4Bn to transform 350,000 homes
Funding to establish Great British Energy
Industry
Launching Modern Industrial Strategy
Investments in Automotive, EVs, Manufacturing,Life sciences, Creative industries. Engineering, Biotechnology, Medical science and Innovation accelerator.
Drive progress in fast broadband
Housing
￡5Bn govt investment in housing. Affordable homes programme of ￡3.1Bn.
Support for small house builders. Will reduce the right to buy discounts and allow Local Authorities to retain receipts in full.
Social housing cPI + 1%
Recruiting hundreds of planning officers
Accelerate remediation to remove dangerous cladding
Transport
Trans-pennine upgrade York Leeds Huddersfield and Manchester and more across to York
East to West rail from Oxford to MK next year and Bedford by 2030
Upgrades around Manchester Wigan and Bolton
HS2 - Funding fully Old oak to Birmingham and funding for tunnel to Euston
West Midlands Metro, Sheffield Supertram and West Yorkshire to Manchester mass transit
￡500M increase in road maintenance
￡650M to improve local transport funding
Bus fare cap will be extended at ￡3 until Dec 2025
Defence
Target 2.5% spend on defence. ￡2.9Bn increase next year and ￡3Bn to Ukraine.
Funding to commemorate VE and VJ day next year and ￡2M for Holocaust education
#budget #business #finance #economy
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2 周It was the highest tax hike from a budget since 1993. That's 31 years. A move towards far left socialism is what Nigel Farage said to me here: https://www.youtube.com/watch?v=nS2UDaFbOGI
Delivering creative, sustainable exhibition spaces. Focused on worthwhile F2F experiences, optimal brand engagement & improving business outcomes.
2 周Thanks Bob. I saw a little of it but as with all these things, only get snippets and sensationalism in the media. Thanks for the summary, really useful. ??
Chartered Accountant ?? Born and Raised on Farms ?? Helping Agribusinesses for 25 Years ?? Passionate About Farming ??
2 周Thank you Bob. The bombshell is the the farming sector and IHT. Clearly Gov aimed at the “life style” farmers claiming APR. Sledge to crack a nut. So generational family farms suddenly can’t pass family businesses on. However, if you are a manufacturer operating from a freehold property, it will pass to next gen without charge. Apparently, we don’t need farming and rural businesses. Apologies for the slight rant. I just can’t believe. I appreciate this is not your normal subject for your audience. All I can think of is UK wants to reach Net Zero, but exporting food production does not achieve Net Zeto. #Scope3emissions ??
Very useful summary thank you. I think that the minimum wage increased make loads of sense. Together with NI rises for employers, we should start to see some productivity coming through. Training and up-skilling should get more priority now. I applaud the soft drinks levy. Capital gains increase is much less than I imagined and entrepreneur's relief is still attractive - entrepreneurs should not be discouraged. Would have been good to see more help for eco-housing
?? Helping ACCIDENTAL business leaders to scale ADOLESCENT businesses. ??Businesses throwing tantrums at GROWTH pains and adult rules?? Leaders promoted for being good at what they did BEFORE?? Led 3 x ￡M+ businesses?
2 周Glad you found it helpful Jonathan Elliott Ben Pike