Rachel Reeves and the 2024 Labour Autumn Budget
The first female Chancellor, Rachel Reeves, delivered the highly anticipated Labour autumn budget, sparking both applause and caution. Reeves set a new tone for the Treasury, focusing on fairness, resilience and strategic investments to future-proof the UK economy. The Chancellor also addressed Capital Gains Tax (CGT) and frozen tax thresholds, aiming to stabilise the foundations and lay the groundwork for future changes.
The Chancellor raised the CGT rate for higher rate taxpayers to 24% from 20%. So, if you are asking whether you should you sell the second property - of course, as long as you are prepared to share the spoils with HMRC! Basic rate also jumped from 10% to 18%. Whilst this is sold as "conservatively progressive", with the UK's CGT still the lowest among European G7 nations, you might think twice before cashing out.
On income tax and employee National Insurance, the budget was as lively as leftovers. The freeze on thresholds until 2028 will continue, meaning taxpayers may inadvertently upgrade into higher tax brackets without earning more. This "fiscal drag" effect could make regular earnings feel a bit like they are in a magic show, where you get levitated - into paying more tax.
The budget stirs up new questions on what job security really means when companies face higher costs, particularly with significantly increased National Insurance contributions. Some businesses may find that job security now feels like trying to keep everyone on the bus while the fares go up. Employers may be left making tough decisions, balancing their commitment to retain staff with the reality of rising operational costs.
On a somewhat more promising note with the ambitious pledge to invest £1.5 billion in new homes, Labour is aiming to house the nation – or at least make a solid dent in the housing crisis, sprinkling £500 million into affordable housing.
Furthermore, boosting the NHS by setting aside £22.6 billion for day-to-day operations should help alleviate pressure on hospitals and staff, whilst also cutting down waiting times. We are yet to see if this effort finally keeps GPs' phones from sounding like a concert ticket hotline. Funding for the Infected Blood Scandal, which we know has impacted so many, will also be a welcome announcement.
Whilst it's clear the chancellor has a tough job to fill the proverbial black hole in public spending, it comes at a cost. The invest, invest, invest approach underscores its drive towards a greener, more resilient UK economy, with ambitious spending plans on energy structure and tech sectors, with a hope for a modern, competitive UK economy.
From housing dreams to healthcare queues and investment in our schools and environmental schemes, Reeves' first budget is ambitious. Whether it will all go off without a hitch (or a quip) is yet to be seen.
