Chancellor Rachel Reeves has set out the first Labour Budget since 2010 which will increase taxes by 拢40bn amid a pledge to "fix the foundations" of the economy, declaring: "This is a moment of fundamental choice for Britain. I have made my choices. The responsible choices."
Here are the main points from the Chancellor鈥檚 Budget:
The Chancellor has raised taxes by 拢40bn. 鈥淎ny chancellor standing here today would face this reality, and any responsible chancellor would take action,鈥 she said.
Among measures are a 1.2% increase for employers鈥 National Insurance contributions to 15% in April 2025. The threshold for paying them will fall from 拢9,100 per year to 拢5,000.
The headline rates of capital gains tax will increase, with the lower rate rising from 10% to 18% and the higher rate from 20% to 24%.
The stamp duty land tax surcharge for second homes will increase by two percentage points to 5%, and will come into effect from Thursday, the Chancellor added.
Changes to inheritance tax includes bringing pension pots within the tax from April 2027 and reforms to agricultural and business property reliefs, raising a total of 拢2 billion a year.
On personal taxes, the Government will not extend the freeze on income tax and national insurance thresholds beyond 2027/28, saying it would 鈥渉urt working people鈥 to keep thresholds frozen.
National insurance, VAT or income tax will not increase for working people in this Budget.
The national minimum wage will rise by 6.7% to 拢12.21 an hour after asking the Low Pay Commission to take the 鈥渃ost of living鈥 into account. The Government will move to a single level of the minimum wage, the Chancellor said, which will mean a flat rate for those 18 and above.
A 鈥渇lat rate duty鈥 on vaping liquid will be introduced from October 2026. Taxes will also increase on tobacco. Meanwhile draught duty on alcoholic drinks will fall by 1.7%, meaning 鈥渁 penny off a pint in the pub鈥.
The 5p cut to fuel duty will be kept into next year, with Ms Reeves saying it would be the 鈥渨rong choice鈥 to increase it. She said keeping the cut and freezing it again will cost 拢3 billion.
HS2 will be brought to Euston Station in London, Ms Reeves confirmed. She said she would commit 鈥渢he funding required鈥 to begin tunnelling work.
Rail links will be upgraded between York, Leeds, Huddersfield and Manchester.
The Government will invest more than 拢5 billion in housebuilding, and 拢1 billion of funding to remove dangerous cladding next year.
Ms Reeves said she is setting a 鈥2% productivity, efficiency and savings target鈥 for all Government departments next year.
The Government hopes to raise 拢6.5bn by giving HMRC new technology and hiring extra staff to crack down on 拢6.5bn in unpaid taxes.
Regions in Scotland and Northern Ireland will get new growth deals, and devolved nations will get the largest real-terms funding amount since devolution. Scotland will get an extra 拢3.4bn, Wales will get 拢1.7bn, and 拢1.5bn for Stormont in Northern Ireland.
On inflation, ministers will maintain the MPC鈥檚 (Bank of England鈥檚 Monetary Policy Committee) target of 2%, as measured by the 12-month increase in the Consumer Prices Index.
Ms Reeves said the OBR has forecast that CPI inflation will average 2.5% this year, 2.6% in 2025, then 2.3% in 2026, 2.1% in 2027, 2.1% in 2028 and 2% in 2029.
The Chancellor said Government borrowing for this year is expected to reach 拢127bn.
Public sector net borrowing will be 拢105.6bn in 2025-26 and drop each year to 拢70.6 billion in 2029-30.
She added the current budget will be in deficit by 拢26.2bn in 2025-26 and 拢5.2bn in 2026-27, before moving into surplus of 拢10.9bn in 2027-28, 拢9.3bn in 2028-29 and 拢9.9bn in 2029-30, meeting the Government鈥檚 鈥渟tability rule鈥 two years early.
