On the 30th October, Britain’s first female chancellor, Rachel Reeves, announced how the government is going to spend the public’s money in Labour’s first budget in 14 years.
Labour has been keen to emphasise the legacy that the previous 14 years of Conservative government has left them.
Reeves referred many times to the “£22bn black hole in public finances” which has meant she has had to increase some taxes to a higher rate than was pledged in their manifesto.
However, most of these hikes are targeted at employers, not workers. For employees, National Insurance, income tax and VAT will remain frozen.
The minimum wage will increase by 6% to £12.21, and from £8.60 to £10 for 18-20 year olds. Reeves stated that this measure is the first step towards Labour’s aspiration for one flat adult wage.
Among a raft of educational investments, Reeves has set aside £1bn for SEN students. This will apply across all educational levels, with universities benefitting too.
Olivia Blake, MP for Sheffield Hallam, welcomed this decision, stating that it was a “positive step forward”.
£300m has also been assigned specifically for universities – a small slice compared to Labour’s investments elsewhere.
Daniel Kebede, the general secretary of the National Education Union, stated that £300 million was “a small dent in the £40bn cumulative cut to school capital funding since 2010”.
The UCU general secretary, Jo Grady, described the funding as “thin gruel” for struggling universities which represent, according to her, “Britain’s last world-leading sector”.
Reeves went on to increase tax on hand rolled tobacco by 10% and impose a flat rate duty on vape liquid, effective as of October 2026. Westminster’s campaign against tobacco products evidently continues despite the change of political party.
In some rare good news for nights out, tax on draught beverages will be slashed by 1.7%, saving us a whole penny on every pint we sink. However, prices of non-draught alcohol will increase in line with inflation.
£1.3bn will be also invested into city transport, including the “renewal of Sheffield Supertram services” Reeves said. However, the cap on bus fares has been raised from £2 to £3.
Labour pledged to completely abolish tuition fees in their 2020 manifesto. Starmer later rescinded this in light of Tory NHS budget cuts, stating that “I’ve taken the decision that we can’t do both.”
