Key points from Rachel Reeves’s speech | UK News

Chancellor Rachel Reeves has delivered Labour’s first Budget since 2010, after the party’s return to power in July’s general election.

She announced tax rises worth £40bn to fund the NHS and other public services.

Here is a summary of the main measures.

• Rates of income tax and National Insurance (NI) paid by employees, and of VAT, to remain unchanged
• Income tax band thresholds to rise in line with inflation after 2028, preventing more people being dragged into higher bands as wages rise
• Basic rate capital gains tax on profits from selling shares to increase from from 10% to 18%, with the higher rate rising from 20% to 24%
• Rates on profits from selling additional property unchanged
• Inheritance tax threshold freeze extended by further two years to 2030, with unspent pension pots also subject to the tax from 2027
• Exemptions when inheriting farmland to be made less generous from 2026

• Companies to pay NI at 15% on salaries above £5,000 from April, up from 13.8% on salaries above £9,100, raising an additional £25bn a year
• Employment allowance – which allows smaller companies to reduce their NI liability – to increase from £5,000 to £10,500
• Tax paid by private equity managers on share of profits from successful deals to rise from up to 28% to up to 32% from April
• Main rate of corporation tax, paid by businesses on taxable profits over £250,000, to stay at 25% until next election

• Legal minimum wage for over-21s to rise from £11.44 to £12.21 per hour from April
• Rate for 18 to 20-year-olds to go up from £8.60 to £10, as part of a long-term plan to move towards a “single adult rate”
• Basic and new state pension payments to go up by 4.1% next year due to the “triple lock”, more than working age benefits
• Eligibility widened for the allowance paid to full-time carers, by increasing the maximum earnings threshold from £151 to £195 a week

• 5p cut in fuel duty on petrol and diesel brought in by the Conservatives, due to end in April 2025, kept for another year
• £2 cap on single bus fares in England to rise to £3 from January, outside London and Greater Manchester
• Commitment to fund tunnelling work to take HS2 high-speed rail line to Euston station in central London
• Air Passenger Duty to go up in 2026, by £2 for short-haul economy flights and £12 for long-haul ones, with rates for private jets to go up by 50%
• Extra £500m next year to repair potholes in England
• Vehicle Excise Duty paid by owners of all but the most efficient new petrol cars to double in their first year, to encourage shift to electric vehicles

• New tax of £2.20 per 10ml of vaping liquid introduced from October 2026
• Tax on tobacco to increase by 2% above inflation, and 10% above inflation for hand-rolling tobacco
• Tax on non-draught alcoholic drinks to increase by the higher RPI measure of inflation, but tax on draught drinks cut by 1.7%
• Government to review thresholds for sugar tax on soft drinks, and consider extending it to “milk-based” beverages

• Day-to-day spending on NHS and education in England to rise by 4.7% in real terms this year, before smaller rises next year
• Home Office budget to shrink by 3.1% this year and 3.3% next year in real terms, due to assumed savings from asylum system
• £1.3bn extra funding next year for local councils, which will also keep all cash from Right to Buy sales from next month

• Social housing providers to be allowed to increase rents above inflation under multi-year settlement
• Discounts for social housing tenants buying their property under the Right to Buy scheme to be reduced
• Stamp duty surcharge, paid on second home purchases in England and Northern Ireland, to go up from 3% to 5%
• Current affordable homes budget, which runs until 2026, boosted by £500m

• Office for Budget Responsibility (OBR) predicts the UK economy will grow by 1.1% this year, 2% next year, and 1.8% in 2026
• Inflation predicted to average 2.5% this year, 2.6% next year, before falling to 2.3% in 2026
• Official definition of UK government debt loosened by including a wider range of financial assets, such as future student loan repayments
• Budget policies will increase UK borrowing by £19.6bn this year and by an average of £32.3bn over the next five years, according to the OBR

• £11.8bn allocated to compensate victims of the infected blood scandal, with £1.8bn set aside for wrongly prosecuted Post Office sub-postmasters
• Government to stop receiving surplus cash from pension scheme for mineworkers
• Extra spending in England will lead to £3.4bn more for Scotland, £1.7bn more for Wales, and £1.5bn more for Northern Ireland in devolution payments