This month, Chancellor Rachel Reeves is set to deliver Labour’s first Autumn Budget since winning the general election in July. The annual statement, detailing the Government’s future spending plans, will take place on Wednesday, October 30.
Although it’s unclear what exactly the speech will entail, the Chancellor previously warned that ‘difficult decisions’ are neccessary to ‘restore economic stability’ in the UK. This follows accusations that the Tories left an alarming £22 billion black hole of ‘unfunded pressures’ which the new Government has now inherited.
In August, Prime Minister Sir Keir Starmer also warned of a ‘painful’ Autumn Budget while adding: “I’ll have to turn to the country and make big asks of you to accept short-term pain for long-term good.”
So, what does this mean for you? The Express has outlined three crucial points you need to know four weeks ahead of the big day.
What is the Autumn Budget?
If you’re still confused about what the Autumn Budget is, fear not. In sum, it’s a statement made by a Government’s Chancellor of the Exchequer to the House of Commons every year.
Not only will it unveil proposals for tax changes, but predictions for the UK’s economy will also be made by the Office for Budget Responsibility (OBR). Announcements for expenditure on public services, like health and policing, may be made during the speech too.
Last year’s Autumn Budget was delivered by the Conservatives’ Chancellor Jeremy Hunt who, at the time, launched a number of key initiatives. This included a freeze on alcohol duty until August 2024 and an increase in the National Living Wage.
This year, Labour’s Chancellor Rachel Reeves will deliver the Budget on Wednesday, October 30.
What might be in Labour’s first Budget?
Taxes:
While the exact details of Labour’s first budget are unclear, the Chancellor has already warned of potential tax rises. In August, she said: “I think that we will have to increase taxes in the Budget,” when asked if they would be increased.
According to The Mirror, she also wouldn’t rule out rises in inheritance tax or capital gains tax, with the latter referring to a tax on the profit you make when selling an asset that’s increased in value. This could include real estate or stocks, for instance.
Fuel duty:
Beyond this, Sir Keir Starmer hasn’t eliminated the possibility of changes to fuel duty either, as per the BBC. This is a tax included in the price of fuel sold in the UK for the purposes of heating or motoring.
Experts at Simply Business explained: “Fuel duty has been frozen since 2011-12, but Sir Keir Starmer refused to rule out raising it in the run up to the election. The previous government kept fuel duty frozen (with a 5p cut) for the 14th year in a row, so this would be a major change.
“Any increase would definitely impact small business owners who rely on their vehicle for work, raising their costs further.”
National Insurance, VAT and income tax:
Despite the uncertainty, the PM has previously assured that National Insurance, VAT and income tax won’t be touched in the midst of his efforts to support ‘working people’. Though, he has warned of a ‘painful’ Autumn Budget while adding: “I’ll have to turn to the country and make big asks of you to accept short-term pain for long-term good.”
What has Labour done already?
Ahead of the July election, Labour outlined six key areas it would prioritise while governing the UK. These are:
- Deliver economic stability.
- Cut NHS waiting times.
- Launch a new Border Security Command.
- Set up Great British Energy (a publicly-owned clean power company to boost energy security).
- Crack down on antisocial behaviour.
- Recruit 6,500 new teachers.
Although it’s still early days, the new Government has made a few changes in its first few months in office. Crucially, this includes two major changes that affect elderly people.
Pensions:
From April 6, 2025 the state pension is set to rise by up to £460 a year in what’s been dubbed as the ‘triple lock’ guarantee. Experts like Martin Lewis have labelled this initiative ‘good news’, though he pointed out two specific downsides.
On X, formerly Twitter, he explained: “[One] that starts next April. This winter most pensioners are facing (looking at energy bills alone) a typical £500 higher cost compared to last (energy bills are £100ish cheaper, but no £300 cost of living payment, no up to £300 winter fuel payment).
“[Two] the full state pension rise is for those who get the full state pension. There are up to 800,000 of the poorest pensioners who get less than the full state pension (£11,400 a year) who aren’t claiming pension credit and will miss out on the winter fuel payment even though they should get it.
“They are very hard to reach and will be under huge financial pressure. These are therefore people the govt said should be helped but due to difficulties in the system won’t be. These are the people I’m most worried about, some of whom may end up choosing between heating and eating.”
Winter Fuel Payment:
Chancellor Rachel Reeves announced that households in England and Wales would ‘no longer be entitled to the Winter Fuel Payment unless they receive Pension Credit or certain other means-tested benefits’. Means-testing refers to issuing benefits based on your income and savings.
Launched in 1997, the Winter Fuel Payment is an annual tax-free grant designed to give elderly people support in heating their homes during the colder months.
Documents from the House of Commons suggest that more than eight million households in Great Britain were expected to receive a Winter Fuel Payment for winter 2023/2024, totalling £2 billion.
But now, AgeUK estimates that 2.5 million pensioners who need the support will no longer receive it due to Labour’s recent actions. The charity explains: “We’re disappointed that the Government won the vote to continue these plans, but we won’t stop campaigning for every older person who needs support this winter.”
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