Chancellor Sets Out Autumn Budget Amid Economic Pressures
Labour scrap the 2-child benefit cap and increase taxes with Rachel Reeves Autumn budget.
Rachel Reeves has unveiled the anticipated Autumn Budget, which has drawn a mix of criticism and praise.
Her most controversial reforms were leaked prior to the entire budget being read. In an OBR (Office for budget responsibility) report it was announced that the unpopular 2-child benefit cap was to be scrapped. The OBR estimate this will cost £3 billion by 2029-30.
Chancellor Reeves will be implementing what has been described as a “stealth tax” with people paying more in tax with the extension of the freeze on tax thresholds. She also plans to increase tax on those who own homes worth over £2 million.
Other reforms include the retention of the 5p fuel duty with more taxes to be placed on drivers.
A popular reform was Reeves confirmation that the Labour party would not be returning to austerity. Austerity reforms tend to cut public spending. It was used by the coalition government in 2010 where reforms are believed to have led to 190,000 excess deaths.
Reeves said she wanted to help with cost of living by providing:
“immediate relief for families”
She confirms that welfare spending will increase from £333 billion this year to approximately £389 billion in 2029. She has promised that the NHS will remain, with a £300 million investment into technology to improve healthcare.
Rachel Reeves states that:
“This Budget will bring down inflation”
Rachel Reeves will be cutting cash ISAs. An ISA stands for individual savings accounts. Many students rely on these accounts to start saving. Reforms allow people to save up £12,000 in cash ISAs tax-free. The previous amount was £20,000.
Chancellor Reeves confirmed that the minimum wage will be going up in April. Those aged 18, 19 or 20, the National Minimum Wage will increase to £10.85 an hour, up from £10.
The biggest controversy was not to do with the actual budget but with the leaks that happened prior to it being read. The house speaker had called out Reeves for having leaked some provisions to the press but soon after the OBR had apologised for the leaks.