Rachel Reeves delivered the first Labour Budget in 14 years and also the first ever by a female Chancellor this lunchtime.
In a lengthy speech, she promised to “invest, invest, invest” while announcing a slew of tax changes – but also some tax freezes – which she says will increase revenue to the Exchequer by £40 billion.
Among the many headlines is an increase in National Insurance contributions for employers, by 1.2 per cent to 15 per cent from next April, which is expected to generate an additional £25 billion per year.
There will also be an increase in Capital Gains Tax, a freeze on fuel duty next year and the long-trailed introduction of VAT on private school fees from January.
The current freeze on income tax and National Insurance thresholds will not be extended beyond 2028 while the national minimum wage is also set to increase.
Click through here for a handy summary of the key points in today’s Budget.
Business leaders from across the West Midlands have been giving their live reaction as the news comes in.
This story will be updated throughout this afternoon.
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Nick Wright, tax director at Solihull accountancy firm Jerroms Miller, said: “Following months of speculation about the potential scrapping of business asset disposal relief, the decision to keep it is certainly an anticlimax but it will undoubtedly be welcomed by many.
“We will see increases in the rate from April 2025 to 14 per cent and a further increase from April 2026 to 18 per cent.
“I expect we will still see business owners looking to take advantage of the current ten per cent rate over the next five months where possible.
“Keeping business asset disposal relief provides a significant financial incentive for investment and business growth which is positive for ongoing entrepreneurship and the growth of the economy.”
Mitchell Barnes is chief executive of Warwickshire-based Ryse 3D, a specialist in production 3D printing for hypercar projects and aerospace, medical and renewables clients.
He said: “It’s a budget that unfortunately I think we were all expecting and has done little to reassure businesses that Labour understands what the economy is all about.
“We’re a high-tech company which exports globally and should be the poster boy for what ‘growth’ looks like yet I find myself questioning whether the Government actually wants firms like Ryse 3D based here.
“There’s no question we will succeed but it will be despite policy, tax rises and worker reforms which will shackle employers and force us to consider investment and recruitment decisions going forward.
“The Capital Gains Tax increase will simply turn future entrepreneurs off. Where is the incentive to take risk, where is the incentive to put so many hours into growing something.”
Raj Kandola, director of external affairs at Greater Birmingham Chambers of Commerce, said there was no getting away from the fact businesses would bear the biggest brunt in tax rises as the Chancellor attempted to strike the right balance between fiscal responsibility and driving investment.
“Raising the rate and lowering the threshold for employers National Insurance will ultimately hit those employing lower paid workers,” he said.
“Coupled with the increase in the National Living Wage and other measures associated with the Make Work Pay agenda, many firms will continue to suffer from crippling cost pressures as data from our latest Quarterly Business Report underlines.
“There were measures announced that will be welcomed by businesses – particular rate relief for those operating the retail, hospitality and leisure industry and a continued freeze on fuel duty.
“Ultimately, the Chancellor could have gone further to bring down price pressures and encourage firm level investment such as offering a fundamental overhaul of the business rates system and extending the full expensing scheme to leased assets.
“It was pleasing to see the Government commit to deliver HS2 to London Euston – we can only hope they take the pragmatic step of safeguarding the land beyond Birmingham to Manchester in order to revisit this part of the project when the fiscal picture improves.”
Russell Luckock, the former head of Birmingham engineering firm AE Harris and a regular columnist in our sister paper the Birmingham Post, said: “One of the fastest deliveries of a budget that I have ever seen – quicker even than Gordon Brown.
“Glad to see the measures that will assist business in the West Midlands, sad to get confirmed that the new minimum wage will rise by 6.7 per cent and the younger age group by circa 16 per cent. Coupled with employer’s National Insurance contributions, costs for business will not help competitiveness.
“Pleased to see commitment to the swifter payment of compensation to the contaminated blood suffers and the sub-postmasters Horizon scandal.
“Health boards will be pleased to hear about more money coming in their direction but this is a huge tax raising Budget the ramifications of which will be felt in the years to come.”
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