Autumn Budget: what you need to know

This Budget marks Labour’s first in 14 years, but what has been promised?

On 30 October, Labour announced their first Budget since coming into power.

It was delivered by the Chancellor Rachel Reeves, who said that this Budget involved making “difficult decisions”, making history by being the first female Chancellor to deliver the Budget.

Prior to the Budget, prime minister Keir Starmer said on X that it marked “a huge day for Britain.”

He said: “After 14 years of decline, we will invest in our country - rebuilding our schools, hospitals and roads.

“We won’t shy away from the tough decisions to grow our economy and protect working people’s payslips.”

Cost of living crisis

One of the most pressing issues highlighted in the Budget was the cost-of-living crisis facing the UK population.

More than 40 per cent of Brits are feeling worse off than they felt last year and 17 per cent struggle to afford essentials, despite inflation dipping below two per cent last week, new research conducted by YouGov on behalf of the Stop the Squeeze campaign has found.

In an effort to combat the crisis, Reeves confirmed in the Budget that minimum wages will rise in April, with rates for over-21s set to go up to £12.21 an hour.

Fuel tax is another aspect that greatly impacts people’s living costs. Reeves said that increasing fuel duty next year would be the “wrong choice”, so she will extend the freeze for a year and maintain the last government’s 5p cut.

Economic growth and infrastructure

The Office for Budget Responsibility (OBR) also predicted that CPI inflation in the UK will average 2.5 per cent this year, 2.6 per cent in 2025, then 2.3 per cent in 2026, 2.1 per cent in 2027 and 2028 and 2.0 per cent in 2029.

Reeves said the “government has been clear from the start it will not tolerate wasteful spending – and that means treating taxpayers’ money with respect.

“For the next financial year, all government departments have a two per cent productivity, efficiency, and savings target that is expected to save billions of pounds.”

The Budget document also confirmed a ‘nearly 50 per cent increase, in 2024-25, in funding for local roads maintenance’ which would see the Treasury allocating almost £1.6 billion in local roads maintenance.

The government also said they will fix an extra one million potholes per year, with an additional £500 million for local road maintenance in 2025-26 – an almost 50 per cent increase on the commitment made by the previous government for the current financial year.

The government also announced over £650 million for improving transport in towns, villages, and rural areas alongside the city regions.

Single bus fares will be kept down at £3 until the end of 2025, as part of an over £1 billion package to support bus services across the country.

In housing, there is £500 million in new funding for the Affordable Homes Programme.

Social care and the NHS

The NHS didn’t get its first detailed mention in Reeves’ Budget until an hour in, but she announced an additional £22.6 billion of resource spending for the day-to-day health budget for this year and next.

She also said there would be an additional £3.1 billion increase to the capital investment budget.

There will be £1.3 billion for additional grant funding for local government, including £600 million for social care.

Schools and education

The government is also investing £1.4 billion to help rebuild “crumbling” school buildings. As well as this, there will be a SEND funding increase of £1 billion as well a £300 million investment in Further Education.

Responding to the budget, Cllr Louise Gittins, chair of the Local Government Association, said the funding “will help meet some – but not all – of the significant pressures in adult and children’s social care and homelessness support.

“Extra funding for children with special educational needs and disabilities is positive but also now needs to be followed by fundamental reform of the SEND system, focussing on improving inclusion in mainstream settings and writing off councils’ high needs deficits. We are also pleased the government is providing additional funding to continue children’s social care reforms and to pilot a Kinship Allowance and will set out plans to promote early intervention to help prevent children and families reaching crisis point in the first place.”

She continued to say: “Today’s Budget [...] includes some positive measures which we have called for, such as Right to Buy reform, funding for potholes, childcare, and affordable housing, which will help councils support early years, repair roads, and build new and improve existing homes. An extension to the Household Support Fund next year will also help councils provide welfare support to vulnerable households. These are all vital issues for our communities.

Gittins added: “This is a step in the right direction, but councils and the services they provide to their residents still face a precarious short and long-term future. The government needs to give explicit clarity on whether councils will be protected from extra cost pressures from the increases to employer national insurance contributions.

“Only with greater funding certainty through multi-year settlements and more clarity on financial reform, can councils protect services, meet the needs of residents and work in partnership on the government’s priorities, from social care to housing, inclusive economic growth and tackling climate change. We look forward to continuing to work in partnership with the government to address these issues for councils and communities.