Chancellor Rachel Reeves sought to inject stability and confidence into the economy with a Budget aimed at balancing the demands from business and Labour backbenchers.<\/p>\n
She scrapped the two-child benefit cap, a policy that is estimated to lift 450,000 children out of poverty and had been a priority for Labour MPs. There were also above-inflation increases in the state pension and the minimum wage.<\/p>\n
But she also sought to position her second Budget to be more friendly to entrepreneurs.<\/p>\n
Reeves’ first Budget was unpopular with business for its increase in employers’ national insurance contributions, which has been blamed for a year of sluggish economic growth.<\/p>\n
“Our job is to make Britain the best place in the world to start up, to scale up and to stay,” Reeves said, in a nod to the anecdotal stories of entrepreneurs relocating to Dubai and other locations.<\/p>\n
She introduced changes to UK listings relief, a three-year exemption from stamp duty reserve tax for companies who choose to list in Britain, and launched a consultation on how the tax system can better back entrepreneurs.<\/p>\n
“If you build here, Britain will back you,” she said.<\/p>\n
However, measures “narrowing the gap between the tax on income from assets and income from work”, badged as targeting landlords, will see the basic and higher rate of tax on property, savings and dividends income increase by two percentage points.<\/p>\n
And successful entrepreneurs who own a property worth more than \u00a32m will be among those hit with a surcharge of at least \u00a32,500 a year from 2028.<\/p>\n
Reeves also reduced the attractiveness of an exit route for business owners, employee ownership trusts (EOTs), cutting tax relief from 100% to 50%.<\/p>\n
There were also a number of revenue-raising measures.<\/p>\n
Personal tax thresholds will be frozen for another three years, stretching this out to 2031 in a move seen as a stealth tax as inflation-linked pay rises bring more people into higher tax bands.<\/p>\n
She nearly doubled remote gaming duty and brought in a two-thirds increase in online betting duty, but left in-person betting duty, in part staving off complaints from bookmakers who had warned of mass closures of high street betting shops.<\/p>\n
Electric vehicle excise duty is being introduced, at 3p per mile for electric cars and 1.5p for hybrid vehicles, as the popularity of EVs continues to increase.<\/p>\n
“I will grow our economy through stability, investment and reform”, Reeves said.<\/p>\n
“I’ve met my fiscal rules and built our economic resilience for the future. I have asked everyone to contribute, yes, for the security of our country and the brightness of its future, but I have kept that contribution as low as possible by reforming our tax system, making it fairer and stronger for the future.”<\/p>\n
Reeves delivered a combative performance in what was positioned as a critical speech for the Chancellor.<\/p>\n
She reiterated these were “my choices” and “fair and necessary choices”.<\/p>\n
Those choices included devolving \u00a313bn to mayors to invest in skills and business support, and providing backing for the Midlands Rail Hub, Transpennine route upgrade and Northern Powerhouse Rail.<\/p>\n
The Chancellor introduces “permanently lower tax rates” for more than 750,000 retail, hospitality and leisure properties, paid for in part by higher rates for large properties such as the warehouses used by the largest online retailers.<\/p>\n
Funding will make under-25 apprenticeships completely free for SMEs as part of a package to address rising youth inactivity.<\/p>\n
Reeves was delivering her second annual Budget in a position that is very different from the optimism of the landslide general election victory just 17 months ago.<\/p>\n
But what hasn’t changed is the sluggish performance of the UK economy, despite being able to claim being among the fastest-growing of the G7 economies.<\/p>\n
The Office for Budget Responsibility (OBR) has forecast that real GDP will grow by an average of 1.5% over the forecast, 0.3 percentage points slower than projected in March, due to lower underlying productivity growth.<\/p>\n
However it revised up its short-term forecast for earnings growth and inflation.<\/p>\n
The OBR’s forecast provided some drama before the Chancellor’s speech after it was mistakenly published online too early, leaking key details of the Budget.<\/p>\n","protected":false},"excerpt":{"rendered":"
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