Autumn Budget 2024 | Main takeaways
Housing, hospitals, and schools were all winners in Rachel Reeves’s first Budget as she reiterated her desire for more public investment and announced tax rises of £40bn.
The key theme of her speech was cautious renewal, with references to her predecessors’ economic mismanagement acting as a buffer for her difficult decisions. Reeves also highlighted her intention to reduce reliance on borrowing – targeting a fall from 4.5% to 2.5% of GDP this year.
Investment in housing
Reeves committed to £5bn of government investment into housing, including the teased £500m boost to the Affordable Homes Programme. The clogged-up planning system will see £46m of additional funding to support recruitment into local planning authorities and pledge to digitise local government.
Schools funding
The Chancellor allocated £1.4bn to rebuilding schools, a £550m increase on this year, with plans for 100 projects to begin delivery in England over the next year, and 518 schools in total through the programme. A £2.3bn rise in the core schools budget will pay for the recruitment of 6,500 teachers. A previously touted commitment to introduce VAT on private schools was also carried through and will start from 1 January 2025.
Skills England
This is a new programme aimed at improving educational outputs and occupational mobility while addressing skills challenges that are holding back some sectors. Skills England’s main priority will be to ensure a highly trained workforce is provided to grow the economy in the future.
NHS Hospital Programme
A £22.6bn increase in day-to-day NHS spending as well as an increase of £3.1bn to provide capital investment in health. Reeves also committed £1.5bn for new surgical hubs and diagnostics scanners. Objectives to improve productivity using technology will see a £2bn investment aiming to free up staff time and improve record keeping.
Key sector funding
Specific industries, earmarked by the Chancellor as key to the longevity of the UK economic success, were granted long-term funding as part of the Industrial Strategy. The aerospace sector, which has a strong regional presence in the North West will see £975m in funding. There will be £2bn over five years for the automotive sector driving growth in areas such as the North East. A further £520m will be allocated for a Life Sciences Innovative Manufacturing Fund.
Transport
Increased investment into local transport in the form of £200m for City Region Sustainable Transport Settlements which would bring local transport spending for Metro Mayors in 2025/26 to £1.3bn. Reeves committed to delivering the TransPennine Route Upgrade between York and Manchester, as well as pressing on with the Northern Powerhouse Rail plans. Sheffield’s Supertram and the West Yorkshire Mass Transit system will also get financial support. Funding to the tune of £650m for local transport in regions outside of combined authorities was also confirmed.
Capital Gains Tax
Reeves announced an increase in both the lower rate and higher rate of capital gains tax. The lower rate will rise from 10% to 18%, the higher rate will increase from 20% to 24%. The chancellor promises this will keep the UK tax system internationally competitive, with lower rates than comparable EU countries.
Business rates
The government will provide a 40% business rates relief for retail, hospitality, and leisure sectors – a reduction from the previous 75%. In addition, for the next fiscal year, the small business multiplier in England will be frozen. The standard multiplier will be uprated by the September 2024 CPI rate to 55.5p.
Stamp Duty
To come into effect imminently, Stamp Duty will be increased by 2 percentage points from 3% to 5%. The aim of this policy is to provide first-time buyers with a comparative advantage over second-home buyers, landlords and businesses purchasing commercial property.
Green energy
An allocation of £8bn for carbon capture projects and carbon storage infrastructure was given. Reeves stated that the UK had already secured £34.8bn of private investment into the UK’s clean energy sector at the International Investment Summit. GB Energy was given £125m.
The challenge will now be to spend the extra money efficiently and on the right projects. Expect to hear the phrase “shovel ready” return. But is the property and construction industry ready and prepared to shift the focus and resources to traditionally less “attractive” (less lucrative) projects in social housing, NHS and schools?
Manchester and GM could be well placed given reputation to “get things done”.
By John Keyes
Sunak’s reply wiped the floor with Reeves. A bad budget for businesses, and ultimately that burden will be passed on to a degree to employees.
By Anonymous
Fantastic to have the adults back in charge. Not the best but Reeve’s was a sensible budget which looks to unlock growth, rather than just give money to billionaires and crash the economy like her reckless predecessors. The likes of whom we’ll hopefully never see in Westminster ever again.
By Anonymous
Not mentioned here, but scrapping the A5036 Princess Way/Port of Liverpool Access Road is mind-bogglingly dim and short-sighted.
Loads of public money has already gone into Liverpool 2/Seaforth but now stuck with terrible access – through polluted residential areas – in order to connect with the motorway network.
Not helped by Sefton Council and 2 local Labour MPs siding with the Nimby dogwalkers from Crosby, but it knocks a hole in plans for the wider City Region to benefit from growth of the port.
The business will just go to other ports – there isn’t the money for new rail links either, infrastructure or particularly practical routes, and the shipping industry won’t want to take on any additional cost or complexity it can just avoid by going elsewhere.
By Vimrose Ralley
Given she raised tax by 40bn, there isn’t a lot of investment going on. Just a lot of business as usual.
Also, she didn’t commit to NPR – she effectively killed the Liverpool end of it.
Yet another betrayal from yet another British government.
By Jeff
Sheffield has a tram, Manchester has a tram, Leeds will be getting a tram, meanwhile Liverpool has no plans to build a tram network nor significantly extend the Merseyrail network, especially in Liverpool East which is badly served.
By Anonymous