8,600 jobs fuelled across the UK by the Chancellor’s National Wealth Fund since July, with almost £1.6 billion of private investment unlocked, delivering on the Plan for Change.
Jobs and investment spread across UK’s growth sectors from clean energy to digital infrastructure, driving government’s number one mission to grow the economy
New deal also announced today for North Wales with £92 million committed to support crucial improvements to coastal flood defence barriers protecting business and homes.
Thousands of jobs have been fuelled by the Chancellor’s National Wealth Fund in the last six months, with almost £1.6 billion of investment unlocked, driving growth across all corners of the UK.
The Chancellor began work just days into office to establish a new National Wealth Fund (NWF) that would invest in the new industries of the future to create good jobs and opportunity across every part of the country. With £27.8 billion of firepower, the NWF will help drive the government’s Plan for Change and turbocharge growth across the country to raise living standards in every part of the United Kingdom.
The jobs that have been created will support the digital and clean energy sectors, including 6,500 expected to be created in the retrofit sector across the UK, with the NWF providing a financial guarantee that will see Lloyds and Barclays deliver £1 billion of funding to deliver improvements such as low carbon heating and insulation in social housing.
New figures reveal almost £1.6 billion of private investment has been leveraged into projects across the UK’s clean energy and growth sectors over the past six months. This includes to support faster broadband connections for thousands of businesses and households in Cornwall, Yorkshire, Lincolnshire and Cumbria, fuelling economic growth.
Millions of pounds have also been committed to help West Suffolk Council to decarbonise its buildings and transition its fleet to electric vehicles, alongside supporting the expansion of a successful rooftop solar scheme.
This innovative investment model has the potential to be replicated by other local authorities and means more businesses can benefit from low cost, low carbon electricity, supporting local businesses and the growth of the clean energy sector.
It comes as today, the NWF announces a loan of £92 million to support Denbighshire County Council’s crucial improvements to coastal flood defence barriers in Denbighshire, North Wales, protecting businesses and homes against the devastating impact of flooding, creating jobs and growth in the construction industry.
Chief Secretary to the Treasury Darren Jones said: “Growth is our national mission, and the cornerstone of our Plan for Change that will improve living standards and put more money in people’s pockets.
“And the National Wealth Fund is playing a vital part in delivering economic growth, securing over a billion of private investment since July in industries that turbocharge growth in our economy and create good quality jobs across the UK”.
The Chancellor announced in October how the NWF would drive long-term investment in Britain, working hand in hand with business to create new high skilled jobs right across the UK, helping make people better off.
To mobilise investment at pace, the NWF will expand on the UK Infrastructure Bank’s offer including additional financial instruments so it is more catalytic and will take on more risk to have a greater impact:
The NWF has more capital with £27.8 billion – inheriting UKIB’s £22 billion and having an additional £5.8 billion.
It has a renewed focus to support the delivery of the wider industrial strategy, and the Government’s clean energy and growth missions. At least £5.8bn of the NWF’s capital will focus on the five sectors announced in the manifesto: green hydrogen, carbon capture, ports, gigafactories and green steel.
The NWF will have increased resources and focus on conducting more outreach to identify expanded project pipelines and structure innovative transactions. It will have a strong regional mandate to unleash the full potential of our cities and regions.
Lifting of market access barriers across areas such as agri-food, helping British business compete on level-playing field and grow exports.
Pragmatic cooperation results in agreements worth £600 million to the UK economy over the next five years and sets course to deliver up to £1 billion.
The UK continues to challenge China on areas of disagreement, with the Chancellor raising concerns over China’s support for Russia’s illegal war, domestic interference and sanctions against British parliamentarians.
Working people and businesses across the UK will feel the benefits of agreements worth £600 million to the British economy, as agreed in the 2025 UK-China Economic and Financial Dialogue (EFD).
Chancellor Rachel Reeves was hosted by Vice Premier He Lifeng in Beijing today, in support of a stable and balanced UK-China relationship. Both sides agreed to deeper cooperation across areas such as financial services, trade, investment, and the climate to support secure growth, while being frank and open on areas of disagreement.
Overall, this government’s reengagement with China sets us on course to deliver up to £1 billion of value for the UK economy.
Chancellor of the Exchequer Rachel Reeves said: “The agreements we’ve reached show that pragmatic cooperation between the world’s largest economies can help us boost economic growth for the benefit of working people – a priority of our Plan for Change.
“More widely, today is a platform for respectful and consistent future relations with China. One where we can be frank and open on areas where we disagree, protecting our values and security interests, and finding opportunities for safe trade and investment.
Britain is a leading financial services partner for China. A range of financial services companies with a substantial presence in the market – HSBC, Standard Chartered, Prudential, Schroders, abdrn, Fidelity International and London Stock Exchange Group – accompanied the Chancellor as a business delegation on the trip. The granting of new licences and quota allocations for UK firms such as HSBC, Schroders, abrdn and Aspect Capital to enhance their business in China will further strengthen these ties.
Alongside this are initiatives to improve capital market connectivity – including a commitment to further enhance the UK-China Stock Connect and welcoming the launch of UK-China over-the-counter bond business – as well as initiatives on pensions, countering illicit finance and sustainable finance cooperation.
As part of this, China announced plans to issue an inaugural overseas sovereign green bond – to be used to finance environmentally sustainable projects – in London during 2025. The UK and China will also explore a Wealth Connect programme in recognition of the role asset management has to play in supporting growth. The agreements today in financial services will provide significant value to the UK economy over the next five years.
Both sides have committed to improving existing channels to discuss more sensitive issues, including the need to speak candidly about national and economic security. In her engagement, the Chancellor made clear UK concerns about imbalances in the Chinese economy, and both sides agreed to discuss industrial policy in support of a global level playing field.
The UK and China have agreed to further cooperation including through strengthening the existing UK-China clean energy partnership and committing to a dialogue on international development – to work together in tackling shared global challenges.
The lifting of barriers that restricted export to China across a range of goods and services will support UK exports and innovation, particularly in the agri-food sector where a package headlined by pork, wool, poultry, and pet food stands to boost UK trade with China and support new jobs. China has also agreed to continue to liberalise sectors that restrict foreign investment, such as education and culture, and support a level playing field and fair competition.
The EFD is also part of a wider programme making substantive progress in improving arrangements for UK exports and investors. This is reflected in new agreements on vaccine approvals, fertilizer, whisky labelling, legal services, automotives and accountancy which set course for the EFD to unlock £1 billion of value for the UK economy.
In her meetings with Chinese government counterparts yesterday the Chancellor was clear on the importance of open channels on areas where we disagree. She urged China to cease its support for Russia’s defence industrial base, which is enabling Russia to maintain its illegal war against Ukraine.
In recognition that upholding national security is this government’s first duty, the Chancellor raised this government’s deep concerns over cases involving interference in our democracy and malicious cyber activity emanating from China. Reeves also raised the case of British National Jimmy Lai and raised UK concerns around the respect of protected rights and freedoms in Hong Kong.
She raised human rights, including in Xinjiang, and forced labour. The Chancellor made clear that China’s sanctions against Parliamentarians are completely unwarranted and unacceptable.
Looking ahead, regular dialogues and technical exchanges to progress pragmatic cooperation have been established. This includes further engagement at Ministerial and official level on trade, science and tech, intellectual property, customs, sports and creative industries.
A full list of outcomes from the 2025 UK-China Economic and Financial Dialogue can be found here.
Chancellor visiting Beijing for the first UK-China Economic and Financial Dialogue since 2019 – seeking stability in relationship with world’s second largest economy to achieve secure and resilient growth.
Visit delivers on commitment to explore deeper economic cooperation made by Prime Minister and President Xi at G20 in November.
Reeves will also raise difficult issues, including China’s support for Russia illegal war in Ukraine and concerns over constraints on rights and freedoms in Hong Kong.
Making working people across Britain secure and better off is ‘at the forefront of the Chancellor’s mind’ while in Beijing this weekend for a UK-China Economic and Financial Dialogue (EFD).
Rachel Reeves will meet with her counterpart, Vice Premier He Lifeng, in the Chinese capital today for a series of conversations around the financial services relationship between the two countries, support for safe trade and investment and the importance of cooperation on global issues like climate change.
She will be joined by Bank of England Governor Andrew Bailey, Chief Executive of the Financial Conduct Authority Nikhil Rathi, and senior representatives from some of Britain’s biggest financial services firms as she seeks outcomes that benefit our businesses, support secure and resilient growth in the UK, and finance tackling shared global challenges.
The Chancellor’s visit follows a meeting between Prime Minister Keir Starmer and President Xi Jinping at the G20 Summit last autumn, where they discussed deepening the economic and trade relationship shared by the UK and China, in order to yield mutual benefits, support growth, and have candid discussion on issues where our views differ. As part of this, the Chancellor is expected to raise constraints on rights and freedoms in Hong Kong and to urge China to stop its material and economic support for the Russian war effort in Ukraine.
This is part of the consistent, long term and strategic approach that the government is taking in managing the UK’s relations with China, rooted in UK and global interests. The government will co-operate where it can, compete where it needs to, and challenge where it must, including to protect our values and national security as the first duty of government.
Ahead of her visit, Chancellor of the Exchequer Rachel Reeves said:“Growing the economy and raising living standards is front and centre of this government’s Plan for Change. That growth must be secure, resilient, and built on stable foundations, including through careful pragmatic cooperation with international partners.
“By finding common ground on trade and investment while being candid about our differences and upholding national security as the first duty of this government, we can build a long-term economic relationship with China that works in the national interest.”
While in Beijing, the Chancellor will also visit Brompton’s flagship store. The enduring British bike brand is celebrating its 50th anniversary year, and its flourishing community in the Chinese capital as its foremost market is a major success story for UK exports to China.
In addition to building on the financial services relationship, the EFD will also seek to bring down barriers that British businesses face when looking to export or expand to China, supporting them to seize growth opportunities and follow in the footsteps of brands like Brompton, and other cornerstones of British culture and industry like Jaguar Land Rover, Unilever and Diageo – three companies whom Reeves will also meet with during her visit.
Reeves is also to visit Shanghai on Sunday to engage with representatives across British and Chinese business. Alongside London, the city is a leading global financial centre which has long been important for UK-China economic and financial links, including in financial services with the landmark financial market connectivity initiative between the London Stock Exchange and the Shanghai Stock Exchange entering its sixth year.
China is the world’s second largest economy and the UK’s fourth largest single trading partner, with a trade relationship worth almost £113 billion, and with exports to China supporting over 455,000 jobs in the UK in 2020.
UK stagflation crisis threat demands action
The UK economy is staring down the barrel of the stagflation gun, with stagnant growth and persistent inflation combining to create one of the most challenging financial environments in over a decade.
This is the stark warning from Nigel Green, CEO of deVere Group, as this week the 30-year gilt yield hit a staggering 5.25%—its highest point since the 2008 financial crisis—underscoring the scale of the issue.
He says: “Stagflation’s grip on the UK has been exacerbated by weak domestic growth, which under normal circumstances would prompt the Bank of England to lower interest rates.
“However, with inflation still uncomfortably high, policymakers find themselves in a precarious position, hesitating to make moves that could further weaken the pound and worsen price pressures.
Nigel Green continues: “For Chancellor Rachel Reeves, the situation is particularly dire. Her key fiscal rule—eliminating all non-investment borrowing by 2029—now hangs in the balance, as rising interest payments on debt eat into the Treasury’s capacity to act.
“Achieving this goal will demand either politically challenging tax increases or deep public spending cuts. Both measures will hurt economic growth, amplifying the stagflationary spiral.
“The rise in gilt yields signals growing investor caution about the UK’s economic outlook.
“Higher borrowing costs are creating ripple effects across sectors, from property to retail, as businesses and consumers alike face higher for longer interest rates. At the same time, the weakening pound, spurred by fears of stagnation, makes UK assets more attractive to international investors.
“For global investors, the UK’s predicament is not just a warning—it’s a call to action. Stagflation may erode domestic purchasing power, but it also opens the door to undervalued opportunities in key sectors, particularly for those with a long-term strategy.
“Fixed-income securities are more appealing given their higher yields, especially for those seeking safe havens in a turbulent global economy.”
While stagflation is a daunting challenge, it also forces innovation and adaptation.
“For investors with ties to Britain, this is the time to reassess portfolios, hedge against inflation, and identify sectors that can thrive in a stagflationary environment. History teaches us that industries such as energy, healthcare, and tech have shown resilience, even in periods of economic stagnation.
“The gilt market itself is worth watching closely. The recent yield spike suggests a shift in sentiment, but for those who act decisively, these higher yields could lock in significant returns over the medium term.
“Similarly, the weakening pound, while a burden for imports, is a boon for exporters and foreign investors looking to acquire UK assets at a relative discount.”
Nigel Green concludes: “The looming spectre of stagflation may sound like a warning bell, but it’s also a call for decisive action. The UK’s challenges are real, but so are the prospects for those who think globally and act strategically.”
Chancellor Rachel Reeves and Treasury minister Tulip Siddiq, have opened the 100th banking hub in Darwen, Lancashire.
Banking hubs have been set up in response to bank branch closures, with 350 set to be rolled out by 2029.
High streets up and down UK will be revitalised – helping raise living standards and deliver the Plan for Change
Chancellor of the Exchequer, Rachel Reeves, and Economic Secretary, Tulip Siddiq, have opened the UK’s 100th banking hub in Darwen, Lancashire, which has been set up in response to bank branch closures in the town.
The newly opened banking hub will give customers of the largest high street banks the ability to get cash out, deposit cheques and ensures that local residents have access to face to face banking services.
Kickstarting economic growth is the number one mission for this Government – something cemented in the Plan for Change launched last week, where the Prime Minister redoubled our commitment to raise living standards in every part of the United Kingdom. The roll out of banking hubs will be a significant boost for local people and businesses, helping to revitalise the local high street and raise living standards across the UK.
The opening of the 100th banking hub is a significant landmark on the road to delivering on the government’s manifesto commitment to work with industry to open 350 banking hubs by the end of this parliament.
Rachel Reeves, Chancellor of the Exchequer, said: “Reaching this milestone of 100 banking hubs is a huge step towards making sure that people across the country have access to essential face-to-face banking services.
“High streets are the beating heart of our communities but were neglected for too long under the previous government. We are revitalising our high streets with our target for 350 banking hubs, reforming business rates to make them fairer and clamping down on antisocial behaviour.”
Banking hubs are a collaborative industry initiative, set up in response to bank branch closures onhigh streets across the country.
Instead of one bank owning a branch, the responsibility is shared between the banks. This means that they can share the running costs and all operate in one convenient location.
All customers will benefit from Monday-Friday access to cash and basic banking services via a traditional counter service operated by the Post Office. Community bankers from each of the five banks with the largest number of customers in the area will also come in one day per week to assist their customers with more complex banking issues like debt advice, bereavement services and fraud support.
In the Darwen banking hub, the participating banks are NatWest, Santander, Lloyds, Halifax and Barclays, the banks with the most customers in that location. Opening the banking hub will protect access to cash and banking services for 10,000 local residents and 150 shops within 1 kilometre of Darwen town centre.
The 100th opening is a significant milestone. In September, Economic Secretary secured a historic agreement from industry to deliver on this commitment, with 230 hubs expected to be open by the end of next year, helping to revitalise towns and high streets up and down the country.
Tulip Siddiq, Economic Secretary to the Treasury, added:“We are delighted to see the continued growth of banking hubs, which are playing an essential role in meeting the needs of communities where traditional banking options have declined.
“These hubs are not only vital for residents and businesses, but they also play a key role in revitalising our high streets, bringing footfall back to town centres, and repurposing unused buildings for community benefit.
“The success of these hubs proves that shared banking services can provide a solution that benefits everyone, from residents to local businesses.”
The opening of banking hubs can play an important role in revitalising our high street and repurposing disused buildings in town centres all while providing a vital service to businesses and people in those communities.
Evidence from Brixham in Devon and Rochford in Essex where banking hubs have recently opened has backed this up, research from Cash Access UK the group that run banking hubs shows that almost half of businesses surveyed saying it has increased footfall in the town and 30% of residents saying that they visit the town more regularly and stay for longer because a banking hub has opened in the town.
Gareth Oakley, CEO, Cash Access UK, said:“Access to cash and face-to-face banking services remain vital to millions of people and businesses who rely on it.
“We’re delighted that banking hubs, alongside deposit services are proving to be successful and are making a real difference to communities and high streets up and down the country.”
Rachel Reeves calls for business-like relationship with the EU to drive more trade, support businesses and boost economic growth that benefits working people
Chancellor to put making working people better off at the heart of economic reset with the EU
Reeves to be the first UK Chancellor to address EU finance ministers since the UK left the EU
Making working people better off must be the aim of our economic reset with the EU, Chancellor Rachel Reeves will tell a meeting of finance ministers in Brussels today.
Reeves becomes the first UK Chancellor to attend a meeting of EU finance ministers since the UK left the EU – a clear signal of the UK Government’s commitment to reset the relationship with the EU and realise the economic potential of our shared future.
In her speech, the Chancellor will set out that part of the government’s mission to drive economic growth and make working people better off, a central part of our Plan for Change, will be achieved through a closer relationship with the European Union.
She will talk to three key areas of the UK-EU relationship: tackling shared challenges, including the war in Ukraine; championing free trade as a driver of economic competitiveness; and strengthening bilateral economic partnerships.
She will go on to say that by taking these on together, we can have a meaningful impact on putting more money in people’s pockets through lower prices and better jobs through increased investment.
Rachel Reeves, Chancellor of the Exchequer, will say:“This is the first time a British Chancellor has addressed the Eurogroup since Brexit.And there could be no more important moment to do so, than now.
“It is a signal of the new UK Government’s commitment to resetting our country’s relationship with the European Union; and the importance I place in realising the economic potential of our shared future.”
She will add:“I know that the last few years have been fractious. Division and chaos defined the last government’s approach to Europe. It will not define ours.
“We want a relationship built on trust, mutual respect, and pragmatism. A mature, business-like relationship where we can put behind us the low ambitions of the past and move forward, focused instead on all that we have in common.
“And all that we might achieve together to keep our countries safe, secure and prosperous.”
On strengthening economic ties, she will say:“I believe that a closer economic relationship between the UK and the EU is not a zero-sum game. It’s about improving both our growth prospects.
“The reset in relations is about doing what is the best interests of our shared economies and those that depend on it.
“That means breaking down barriers to trade, creating opportunities to invest and helping our businesses sell in each other’s markets.
“That’s why I’m here today; that’s what our reset seeks to achieve.”
Ms. Reeves will also underscore the importance of the UK and EU’s unwavering support for Ukraine over 1,000 days since Russia’s invasion, delivered most recently through a G7 loan of $50bn backed by the extraordinary profits on immobilized Russian sovereign assets. She will say that Ukraine’s national security ensures the UK and Europe’s national security too.
While in Brussels, the Chancellor will also attend a series of bilateral meetings with European counterparts. International economic partnerships are a crucial part of the government’s number one mission to grow the economy and make every part of the UK better off.
There will no return to the single market, the customs union, or freedom of movement. But, following their meeting on 2 October, the Prime Minister and President of the European Commission Ursula von de Leyen agreed to strengthen the UK-EU relationship and put it on a more solid, stable footing.
The EU reset feeds directly into the government’s Plan for Change to be achieved via its five missions – one of which is growth. The reset will help contribute to the government’s ambitions to grow the economy, invest to create an NHS fit for the future and tackle irregular migration.
The UK and the EU share the world’s second largest trading relationship, facilitating over £660 billion (€750 billion) in trade each year. The UK and EU countries together also comprise 24 of NATO’s 32 allies, united in a commitment to collective security.
The government will publish a Trade Strategy in 2025, renewing the government’s commitment to free and open trade.
It will support the government’s Industrial Strategy and Net Zero ambitions and enhance economic security. As part of this, the government will work with the EU to identify areas where the government can strengthen cooperation for mutual benefit, including the economy, energy, security and resilience.
Global partnerships are crucial to the UK government, with direct benefit to the domestic economy – the International Investment Summit held in October secured a record breaking £63 billion of investment and nearly 38,000 jobs are set to be created across the UK as a result.
Today’s Eurogroup attendance comes after Reeves’ speech at Mansion House in November, where she set out that advocating free and open trade especially with economically important partners was in the UK’s national interest. Reeves’ visit to Brussels comes ahead of her next international visit, which will be to Beijing in the new year.
Shevaun Haviland, Director General of the British Chambers of Commerce said:“If our economy is to grow then we must export more. That’s why we urgently need a better trading relationship with our closest and biggest market, the European Union. The current arrangement isn’t working for our members.
“Right now, UK firms wanting to trade with Europe are struggling under huge regulatory and paperwork burdens.
“Businesses will be encouraged to hear the Chancellor talking about a reset in our relationship with the EU which genuinely breaks down barriers to trade.
“A better deal can’t come soon enough for UK exporters. It’s vital that talks move at pace in the coming months to make life easier for businesses to thrive.”
Chancellor takes radical action to drive economic growth
Biggest pension reforms in decades will merge Local Government Pension Scheme assets and consolidate defined contribution schemes into megafunds
Changes could unlock around £80 billion of investment for infrastructure projects and businesses of the future
Local Government Pension Scheme changes will free up money for local public services in the long-term and secure more than £20 billion for investment in local communities
Pension megafunds will be created as part of the biggest set of pension reforms in decades, unlocking billions of pounds of investment in exciting new businesses and infrastructure and local projects.
After her inaugural Budget that ‘fixed the foundations to deliver stability’, Rachel Reeves will use her first Mansion House speech as Chancellor to announce bold action to tackle the fragmented pensions landscape, deliver investment and drive economic growth – which is the only way to make people better off.
The radical reforms, which will be introduced through a new Pension Schemes Bill next year, will create megafunds through consolidating defined contribution schemes and pooling assets from the 86 separate Local Government Pension Scheme authorities.
These megafunds mirror set-ups in Australia and Canada, where pension funds take advantage of size to invest in assets that have higher growth potential, which could deliver around £80 billion of investment in exciting new businesses and critical infrastructure while boosting defined contribution savers’ pension pots.
Chancellor of the Exchequer, Rachel Reeves said: “Last month’s Budget fixed the foundations to restore economic stability and put our public services on a firmer footing. Now we’re going for growth.
“That starts with the biggest set of reforms to the pensions market in decades to unlock tens of billions of pounds of investment in business and infrastructure, boost people’s savings in retirement and drive economic growth so we can make every part of Britain better off.”
Deputy Prime Minister, Angela Rayner said:“We’ve all seen the fantastic work carried out day in, day out, by our frontline workers and it’s about time their pension started working just as hard by driving investment in their communities.
“This is about harnessing the untapped potential of the pensions belonging to millions of people, and using it as a force for good in boosting our economy.”
Pensions Minister, Emma Reynolds said: “Harnessing the power of this multi-billion-pound industry is a win-win, benefiting future pensioners, and our wider economy.
“These reforms could unlock £80 billion of investment into exciting new businesses and critical infrastructure.”
The UK pension system is one of the largest in the world – with the Local Government Pension Scheme and Defined Contribution market set to manage £1.3 trillion in assets by the end of the decade.
However, our pension landscape is fragmented and lacks the size needed to invest in exciting new businesses or expensive projects like infrastructure.
The government’s analysis – published today in the interim report of the Pensions Investment Review at Mansion House – shows that pension funds begin to return much greater productive investment levels once the size of assets they manage reaches between £25-50 billion.
At this point they are better placed to invest in a wider range of assets, such as exciting new businesses and expensive infrastructure projects. Even larger pensions funds of greater than £50 billion in assets can harness further benefits including the ability to invest directly in large scale projects such as infrastructure at lower cost.
This is supported by evidence from Canada and Australia. Canada’s pension schemes invest around four times more in infrastructure, while Australia pension schemes invest around three times more in infrastructure and 10 times more in private equity, such as businesses, compared to Defined Contribution schemes in the UK.
Benchmarking against domestic and international examples show how consolidation of the Local Government Pension Scheme and defined contribution schemes into megafunds could unlock around £80 billion of investment in productive investments like infrastructure and fast-growing companies.
The government is therefore consulting on proposals to take advantage of pension fund size and improve their governance.
Local Government Pension Scheme
The Local Government Pension Scheme in England and Wales will manage assets worth around £500 billion by 2030. These assets are currently split across 86 different administering authorities, managing assets between £300 million and £30 billion, with local government officials and councillors managing each fund.
Consolidating the assets into a handful of megafunds run by professional fund managers will allow them to invest more in assets like infrastructure, supporting economic growth and local investment on behalf of the 6.7 million public servants – most of whom are low-paid women – whose savings are managed.
These megafunds will need to meet rigorous standards to ensure they deliver for savers, such as needing to be authorised by the Financial Conduct Authority. Governance of the Local Government Pension Scheme will also be overhauled to deliver better value from investment decisions, which independent research suggests could free up money in the long-term to support local public services.
Local economies will be boosted by the changes as each Administering Authority will be required to specify a target for the pool’s investment in their local economy, working in partnership with Local and Mayoral Combined Authorities to identify the best opportunities to support local growth. If each Administering Authority were to set a 5% target, that would secure £20 billion of investment in local communities.
A new independent review process will be established to ensure each of the 86 Administering Authorities is fit for purpose.
Defined contribution schemes
Defined contribution pension schemes are set to manage £800 billion worth of assets by the end of the decade.
There are currently around 60 different multi-employer schemes, each investing savers’ money into one or more funds. The Government will consult on setting a minimum size requirement for these funds to ensure they deliver on their investment potential.
The government will also consult on measures to facilitate this consolidation into megafunds, including legislating to allow fund managers to more easily move savers from underperforming schemes to ones that deliver higher returns for them.
On 30 October, Chancellor of the Exchequer Rachel Reeves delivered her first Budget in Parliament. Here are 5 things to know:
1. Major funding boost for the NHS
The government is investing £22.6 billion in the NHS over the next two years. This is the biggest increase in NHS spending since 2010 (excluding COVID-19 years) and will help patients to access 40,000 more elective appointments each week as well as upgrades for GP facilities, new surgical hubs, and more diagnostic scans.
2. Protecting working people’s living standards
The Chancellor confirmed that working people will see no changes to their payslips as there will be no increases to Income Tax, VAT, or employee National Insurance. From April 2025, the National Living Wage will rise to £12.21 per hour – that’s £1,400 more per year for full-time workers. Pensioners will benefit from a 4.1% increase in the State Pension, and the fuel duty freeze means continued support for motorists.
3. Investing in Britain’s future
Major infrastructure investment totalling over £100 billion will go towards rebuilding our crumbling schools and hospitals and fixing our roads, including over 1 million potholes. Funding will also support local transport and regional growth as well as boosting our digital infrastructure, so that everyone across the country can access high power broadband.
4. Supporting businesses and economic growth
We are protecting the businesses that make up our high streets by permanently reducing tax on properties used for retail, leisure and hospitality from 2026. In the meantime, the government is supporting these businesses with a 40% reduction in their business rates bill, capped at £110,000.
We are also freezing the small business multiplier for one year to protect over a million small properties from inflationary bill increases. Lastly, the Chancellor confirmed that she will maintain Corporation Tax at 25% for the duration of Parliament – the lowest rate in the G7.
5. Fair and responsible taxation
We are reforming the tax system, closing loopholes and improving HMRC efficiency. The money saved will go directly to funding public services and fixing the foundations of the economy. Finally, this Budget laid out how we will ensure economic stability through new fiscal rules (rules the government sets itself to manage its own decisions on spending and taxes). The new fiscal rules will make sure that the government only borrows for investment and that public sector debt falls over time.
Chancellor ‘takes long-term decisions to restore stability, rebuild Britain and protect working people across Scotland’
No change to working people’s payslips as employee national insurance and VAT stay the same, but businesses and the wealthiest asked to pay their fair share.
Record £47.7 billion for the Scottish Government in 2025/26 includes £3.4 billion through the Barnett formula.
Funding for Green Freeports, City and Growth Deals, GB Energy and hydrogen projects to fire up growth and deliver good jobs across Scotland.
The Chancellor has ‘delivered a Budget to fix the foundations to deliver on the promise of change after a decade and a half of stagnation’. She set out plans to rebuild Britain, while ensuring working people across Scotland don’t face higher taxes in their payslips.
The UK Government was handed a challenging inheritance; £22 billion of unfunded in-year spending pressures, debt at its highest since the 1960s, an unrealistic forecast for departmental spending, and stagnating living standards.
This Budget takes ‘difficult decisions’ to restore economic and fiscal stability, so that the UK Government can invest in Scotland’s future and lay the foundations for economic growth across the UK as its number one mission.
The Chancellor announced that the Scottish Government will be provided with a £47.7 billion settlement in 2025/26 – the largest in real terms in the history of devolution. This includes a £3.4 billion top-up through the Barnett formula, with £2.8 billion for day-to-day spending and £610 million for capital investment.
Secretary of State for Scotland Ian Murray said: “This is a historic budget for Scotland that chooses investment over decline and delivers on the promise that there would be no return to austerity.
“It is the largest budget settlement for the Scottish Government in the history of devolution, including an additional £1.5 billion this financial year and an additional £3.4 billion next year through the Barnett formula. That money must reach frontline services, to bring down NHS waiting lists and lift attainment in our schools.
“It will also bring a new era of growth for Scotland and the whole UK, confirming nearly £890 million of direct investment into Freeports, Investment Zones, the Argyll and Bute Growth Deal, and other important local projects across Scotland’s communities, as well as £125 million next year for GB Energy and support for green hydrogen projects in Cromarty and Whitelee.
“The increase in the minimum wage will also mean a pay rise for hundreds of thousands of workers in Scotland, with the biggest increase for young workers ever. This is on top of our employment rights bill which will deliver the biggest upgrade in workers’ rights in a generation. The triple lock means an increase in the state pension by £470 next year, on top of £900 this year for a million Scottish pensioners.
“The budget protects working people in Scotland, delivers more money than ever before for Scottish public services and means an end to the era of austerity.”
Protecting working people and living standards
While fixing the inheritance requires tough decisions, the Chancellor has committed to protecting the living standards of working people. The decisions taken by the Chancellor to rebuild public finances enable the UK Government to deliver on its pledge to not increase National Insurance or VAT on working people in Scotland, meaning they will not see higher taxes in their payslip.
The National Living Wage will increase from £11.44 to £12.21 an hour from April 2025. The 6.7% increase – worth £1,400 a year for a full-time worker – is a significant move towards delivering a genuine living wage.
The National Minimum Wage for 18 to 20-year-olds will also see a record rise from £8.60 to £10 an hour.
Working people will benefit from these increases, with there estimated to be over 100,000 minimum wage workers in Scotland in 2023.
The Chancellor has made the decision to protect working people in Scotland from being dragged into higher tax brackets by confirming that the freeze on National Insurance Contributions thresholds will be lifted from 2028-29 onwards, rising in line with inflation so they can keep more of their hard-earned wages.
The Chancellor is also protecting motorists by freezing fuel duty for one year – a tax cut worth £3 billion, with the temporary 5p cut extended to 22 March 2026. This will benefit an estimated 3.2 million people in Scotland, saving the average car driver £59, vans £126 and Heavy Goods Vehicles £1,079 next year.
To support Scottish pubs and smaller brewers in Scotland, the UK Government is cutting duty on qualifying draught products by 1p, which represent approximately 3 in 5 alcoholic drinks sold in pubs. This measure reduces duty bills by over £70 million a year, cutting duty on an average strength pint in a pub by a penny. The relief available to small producers will be updated to help smaller brewers and cidermakers.
Over 1 million Scottish pensioners will benefit from a 4.1% increase to their new or basic State Pension in April 2025. This is an additional £470 a year for those on the new State Pension and an additional £360 a year for those on the basic State Pension.
Households eligible for Pension Credit will get £465 a year more for single pensioners and up to £710 a year more for couples due to a 4.1% increase in the Pension Credit Standard Minimum Guarantee, benefitting 125,000 pensioners in Scotland.
Around 1.7 million families in Scotland will see their working-age benefits uprated in line with inflation – a £150 gain on average in 2025-26.
Reducing the maximum level of debt repayments that can be deducted from a household’s Universal Credit payment each month from 25% to 15% will benefit a Scottish family by over £420 a year on average.
Rebuilding Britain
This UK Government will not make a return to austerity and will instead boost investment to rebuild Britain and lay the foundations for growth in Scotland. This includes £130 million of targeted funding for the Scottish Government, of which £120 million is in capital investment.
The Budget delivers on the first step to establish Great British Energy by providing £125 million next year to set up the institution at its new home in Aberdeen – helping to develop new clean energy projects in Scotland and across the UK.
The UK Government will deliver £122 million for City and Growth Deals, including the continuation of its contribution to the Argyll and Bute Growth Deal which delivers £25 million of investment in the region over 10 years. This Deal will be supported by a rigorous value for money assessment as part of the review of the business cases for projects within it, to ensure best value is being delivered.
The Budget gives certainty to local leaders and investors, confirming funding for the Investment Zones and Freeports programmes across the UK – including Scotland’s Green Freeports.
The Chancellor committed the UK Government to working closely with the Scottish Government on the Industrial Strategy, 10-year infrastructure strategy and the National Wealth Fund – to ensure the benefits of these are felt UK-wide and as part of the relationship reset between governments. These will mobilise billions of pounds of investment in the UK’s world-leading clean energy and growth industries.
To support economic growth and promote Scottish culture, products and services through diplomatic and trade networks, the UK Government is allocating £750,000 for the Scotland Office in 2025/26 to champion Brand Scotland as was committed in the manifesto.
We are supporting Scotland’s world-renowned Scotch Whisky industry by providing up to £5 million for HMRC to reduce the fees charged by the Spirit Drinks Verification Scheme and by ending mandatory duty stamps for spirits on 1 May 2025.
Two electrolytic hydrogen projects in Scotland have been selected for UK Government revenue support through the first Hydrogen Allocation Round: Cromarty Green Hydrogen Project and Whitelee Green Hydrogen. Both projects will bring in significant international investment and create good quality, local jobs.
An extension of the Innovation Accelerators programme will support the high-potential innovation cluster in the Glasgow City Region.
A corporate tax roadmap will provide businesses with the stability and certainty they need to make long-term investment decisions and support our growth mission. It confirms our competitive offer, with the lowest Corporate Tax rate in the G7 and generous support for investment and innovation.
The UK Government will also proceed with implementing the 45%/40% rates of the theatre, orchestra, museum and galleries tax relief from 1 April 2025 to provide certainty to businesses in Scotland’s thriving cultural sector.
Repairing public finances
The Chancellor has made clear that, whilst protecting working people with measures to reduce the cost of living, there would be difficult decisions required. The Budget will ask businesses and the wealthiest to pay their fair share while making taxes fairer. This will go directly towards fixing the foundations of the UK economy.
The rate of Employers’ National Insurance will increase by 1.2 percentage points, to 15%. The Secondary Threshold – the level at which employers start paying national insurance on each employee’s salary – will reduce from £9,100 per year to £5,000 per year.
The smallest businesses will be protected as the Employment Allowance will increase to £10,500 from £5,000, allowing Scottish firms to employ four National Living Wage workers full time without paying employer national insurance on their wages.
Capital Gains Tax will increase from 10% to 18% for those paying the lower rate, and 20% to 24% for those paying the higher rate.
To encourage entrepreneurs to invest in their businesses Business Asset Disposal Relief (BADR) will remain at 10% this year, before rising to 14% on 6 April 2025 and 18% from 6 April 2026-27.
The lifetime limit of BADR will be maintained at £1 million. The lifetime limit of Investors’ Relief will be reduced from £10 million to £1 million.
The OBR say changes to CGT raise over £2.5 billion a year and the UK will continue to have the lowest CGT rate of any European G7 country.
Inheritance Tax thresholds will be fixed at their current levels for a further two years until April 2030. More than 90% of estates each year will be outside of its scope. From April 2027 inherited pensions will be subject to Inheritance Tax. This removes a distortion which has led to pensions being used as a tax planning vehicle to transfer wealth rather than their original purpose to fund retirement.
From April 2026, agricultural property relief and business property relief will be reformed. The highest rate of relief will continue at 100% for the first £1 million of combined business and agricultural assets, fully protecting the majority of businesses and farms. It will reduce to 50% after the first £1 million. Reforms will affect the wealthiest 2,000 estates each year. Inheritance Tax reforms in total are predicted by the OBR to raise £2 billion to support stability.
From 2026-27 Air Passenger Duty (APD) for short and long-haul flights will increase by 13% to the nearest pound, a partial adjustment to account for previous high inflation. For economy passengers, this means a maximum £2 extra per short haul flight and tickets for children under the age of 16 remain exempt from APD. APD for larger private jets will be increased by a further 50%. Passengers carried on flights leaving from airports in the Scottish Highlands and Islands region are exempt from APD.
The rate of the Energy Profits Levy will increase to 38% from 1 November 2024 and the levy will now expire one year later than planned, on 31 March 2030. The 29% investment allowance will be removed.
To provide long-term certainty and to support a stable energy transition, the UK Government will make no additional changes to tax relief available within the EPL and a consultation will be published in early 2025 on a successor regime that can respond to price shocks. Money raised from changes to the EPL will support the transition to clean energy, enhance energy security and provide sustainable jobs for the future.
The Budget also announced a package of measures that disincentivise activities that cause ill health, by:
Renewing the tobacco duty escalator which increases all tobacco duty rates by RPI+2% plus an above escalator increase to hand rolling tobacco (totalling RPI+12%).
Introducing a new vaping duty at a flat rate of 22p/ml from October 2026, accompanied by a further one-off increase in tobacco duty to maintain financial incentive to choose vaping over smoking.
To help tackle obesity and other harms caused by high sugar intake, the Soft Drinks Industry Levy will increase to account for inflation since it was last updated in 2018, and the duty will rise in line with inflation every year going forward.
The UK Government will also uprate alcohol duty in line with RPI on 1 February 2025, except for most drinks in pubs.
The UK Government has set out the next steps to deliver its tax manifesto commitments in the July Statement. Having consulted on the final policy details where appropriate, this Budget delivers the UK Government’s manifesto commitments to raise revenue to pay for First Steps, with reforms that are underpinned by fairness, and tackle tax avoidance by:
A new residence-based regime will replace the current non-dom regime from April 2025 and will be designed to attract investment and talent to the UK.
Offshore trusts will no longer be able to be used to shelter assets from Inheritance Tax, and there will be transitional arrangement in place for people who have made plans based on current rules.
The planned 50% reduction for foreign income in the first year of the new regime will be removed.
Reforms to the non-dom regime will raise a total of £12.7 billion according to the OBR.
The tax treatment of carried interest will be reformed by first increasing the Capital Gains Tax rates on carried interest to 32% and then, from April 2026, moving to a revised regime – with bespoke rules to reflect the characteristics of the reward.
The Chancellor also ‘doubled down’ on fiscal responsibility through two new fiscal rules that put the public finances on a sustainable path and prioritise investment to support long-term growth, and new principles of stability. Spending Reviews will be held every two years, setting plans for at least three years to ensure public services are always planned and improve value for money.
One major fiscal event per year will give families and businesses stability and certainty on tax and spending changes, while giving the Scottish Government greater clarity for in its own budget-setting. A Fiscal Lock will also ensure no future government can sideline the OBR again.
Budget marks ‘step in right direction’
Scotland’s Finance Secretary responds to Budget
Finance Secretary Shona Robison has welcomed additional funding in the Autumn Budget, but said the Scottish Government will still face “enormous cost pressures” despite the measures.
The Finance Secretary said: “We called for increased investment in public services, infrastructure and tackling poverty. This budget is a step in the right direction, but still leaves us facing enormous cost pressures going forwards. The additional funding for this financial year has already been factored into our spending plans.
“By changing her fiscal rules and increasing investment in infrastructure, the Chancellor has met a core ask of the Scottish Government. But after 14 years of austerity, it’s going to take more than one year to rebuild and recover – we will need to see continued investment over the coming years to reset and reform public services.
“Indeed, there is a risk that by providing more funding for public services while increasing employer national insurance contributions, the UK Government is giving with one hand while taking away with the other.
“We estimate that the employer national insurance change could add up to £500 million in costs for the public sector unless it is fully reimbursed – and there is a danger that we won’t get that certainty until after the Scottish budget process for 2025/26 has concluded.
“With the lingering effects of the cost of living crisis still hitting family finances, it is disappointing that there was no mention of abolishing the two-child limit, which evidence shows would be one of the most cost-effective ways to reduce child poverty. Neither was there mention of funding for the Winter Fuel Payment.
“As ever, the devil is in the detail, and we will now take the time to assess the full implications of today’s statement. I will be announcing further details as part of the Scottish Budget on 4 December.”
Child Poverty Action Group: Chancellor misses golden chance to scrap two child limit
16 000 more children will now be pulled into poverty by time new UK child poverty taskforce reports in spring
“Good news on universal credit deductions, but no bold action on child poverty”
Barnett consequentials must now be prioritised to fund action on child poverty in Scotland
Responding to the UK Chancellor’s Budget, John Dickie, Director of the Child Poverty Action Group (CPAG) in Scotland, said;“The Chancellor brought good news on universal credit deductions, but this was not a Budget of bold action on child poverty. She missed a golden chance to scrap the two-child limit, a policy that will pull 16,000 extra children into poverty by the time the government’s child poverty taskforce reports in spring.
We welcome the new UK government’s ambition on child poverty but this budget played for time, time that children and families can’t afford. The UK spending review next spring will have to deliver much more to make a significant difference for children in poverty.”
Mr Dickie continued: “Here in Scotland and looking ahead to the Scottish budget it is vital that wider Barnett consequentials are now used to fund the action needed to deliver on the First Minister’s number one priority of ending child poverty.
“That must include funding a real terms increase to the Scottish child payment, expanding childcare provision, delivering on free school meal promises and increasing the supply of affordable family housing.”
POVERTY ALLIANCE:
Responding to today’s UK Budget, Poverty Alliance chief executive Peter Kelly said: “People across the UK believe in a nation based on justice and compassion. Today’s Budget was an opportunity for the Chancellor to turn those values into action, and to rebuild trust in government. Despite some welcome changes, there is still some way to go.
“Boosting the minimum wage is welcome, because for decades workers have been getting less and less from our growing economy. This increase will go some way to making up the gap, particularly for younger workers. But we need to remember that today’s Budget will still leave the legal minimum wages far lower than the real Living Wage rate – the only wage rate that is solely based on the cost of living – of £12.60 per hour, or £13.85 per hour in London.
“We know that too many people on Universal Credit find themselves pushed into destitution when they are chased for debt by public bodies, so it’s good that the maximum amount of benefit that can be taken from them has been reduced. But the Chancellor could have gone further, by strengthening our social security with a boost to Universal Credit that would guarantee that households can afford life’s essentials.
“She could have made it clear that every child matters, by scrapping the unjust and ineffective two-child limit, and ditching the unfair benefit cap which stops households getting all the support they are entitled to.
“There was a welcome focus on the importance of our public services to our shared prosperity and wellbeing. But the Chancellor could have done more to use our country’s wealth to tackle poverty and invest in a better society. Even with today’s changes, people who earn money from selling shares and business assets will pay Capital Gains Tax at a lower rate than workers pay in Income Tax. That’s just wrong.
“Freezing fuel duty and keeping the previous cuts in place will cost the Exchequer billions of pounds a year. It’s bad value for money, benefits the wealthiest in society most, and does little to make the transition to the green economy. The money would have been better invested in affordable, accessible, and sustainable public transport for all.
“It’s right that big companies pay their fair share towards building a strong society, but the Chancellor must urgently consider how increases to employer National Insurance will hit charities and community groups.
“The support and advice provided by these organisations is vital for people who have been pushed into poverty, but too many are already struggling through a lack of fair funding, and this NI increase could push many over the edge.
“That would be a disaster for our communities, and leave more low-income households facing destitution and despair.”
TUC: Labour’s investment budget has begun process of “repairing and rebuilding Britain”
Union body says budget is a vital first step towards the growth, jobs and living standards working people desperately need
Commenting on Wednesday’s budget statement from the Chancellor Rachel Reeves, TUC General Secretary Paul Nowak said: “The Chancellor was dealt a terrible hand by the last Conservative government – a toxic legacy of economic chaos, falling living standards and broken public services.
“But with today’s budget the Chancellor has acted decisively to deliver an economy that works for working people.
“The government’s investment plans are a vital first step towards repairing and rebuilding Britain – securing the stronger growth, higher wages and decent public services that the country desperately needs.
“Tax rises will ensure much-needed funds for our NHS, schools and the rest of our crumbling public services, with those who have the broadest shoulders paying a fairer share. The Chancellor was right to prioritise hospitals and classrooms over private jets.
“There is still a lot more work to do to clean up 14 years of Tory mess and economic decline. – including better supporting and strengthening our social security system. But this budget sets us on an urgently needed path towards national renewal.”
Shelter Scotland has responded to the UK budget set out this afternoon by Chancellor Rachel Reeves.
The housing and homelessness charity urged the Scottish Government to commit to investing any new capital funding into delivering the social homes needed to end the housing emergency.
However, it also expressed disappointment at the continuation of the two-child limit and ongoing freeze to Local Housing Allowance.
Shelter Scotland Director, Alison Watson, said:“Having declared a housing emergency it’s clear that the Scottish Government must back words with actions.
“It is vital that any capital funding which becomes available as a result of the Chancellor’s investment plans is in turn used by Scottish Ministers to deliver social homes here, but we also need to see growth in the capital budget over a sustained period to support continued investment.
“Delivering more social homes remains the single most effective way to tackle the housing emergency in Scotland, and only the Scottish Government can decide how much of its budget it commits to that endeavour.
“However, we can’t ignore the role that austerity has played in exacerbating Scotland’s housing emergency.
“The freeze on local housing allowance and the two-child limit has forced thousands into poverty; they will continue to do so as it seems the Chancellor has chosen to keep them in place.”
COSLA:
ONE PARENT FAMILIES SCOTLAND:
Scotch Whisky industry says UK government has broken commitment to ‘back Scotch producers to the hilt’
Chancellor increases discrimination of Scotch Whisky and other spirits in on-trade
The Scotch Whisky Association (SWA) says the Chancellor’s decision to further increase duty on Scotch Whisky has broken the Prime Minister’s commitment to ‘back Scotch producers to the hilt.’
In her first Budget, Chancellor Rachel Reeves announced an RPI inflation increase to alcohol duty, but cut duty on draught products in the on-trade by 1.7%. Scotch Whisky and other spirits are excluded from this tax relief.
The SWA had called on the new Chancellor to take the opportunity to reverse the damage done by the 10.1% increase in August 2023. Instead, the damage done to the industry and to government revenue has been compounded by further increasing the tax burden on the sector, which is already the highest in the G7.
Spirits revenue fell by hundreds of millions of pounds as a result of the 10.1% duty increase last year, and the industry has warned that this further tax hike will not deliver the revenue ministers have been promised but will hurt businesses, the hospitality sector and hard-pressed consumers.
Commenting on the Budget, Chief Executive of the SWA Mark Kent said:“This duty increase on Scotch Whisky is a hammer blow, runs counter to the Prime Minister’s commitment to ‘back Scotch producers to the hilt’ and increases the tax discrimination of Scotland’s national drink.
“On the back of the 10.1% duty increase last year, which led to a reduction in revenue for HM Treasury, this tax hike serves no economic purpose. It will damage the Scotch Whisky industry, the Scottish economy, and undermines Labour’s commitment to promote ‘Brand Scotland’.
“She has also increased the tax discrimination of spirits in the Treasury’s warped duty system, and with 70% of UK spirits produced in Scotland, that will do further damage to a key Scottish sector.
“The disastrous 10.1% duty hike last year has now been compounded. This further tax rise means the lessons have not been learned, and the Chancellor has chosen continuity with her predecessor, not change.
“We urge all MPs who support Scotch Whisky to vote against this duty hike and tax discrimination of Scotland’s national drink.”
Rain Newton-Smith, CBI Chief Executive, said:“The Chancellor had difficult choices to make to deliver stability for the economy and public finances. A more balanced approach to our fiscal rules which prioritises capital investment should help to unlock private sector investment in our infrastructure and net zero transition over the long-term.
“This is a tough Budget for business. While the Corporation Tax Roadmap will help create much needed stability, the hike in National Insurance Contributions alongside other increases to the employer cost base will increase the burden on business and hit the ability to invest and ultimately make it more expensive to hire people or give pay rises.
“Only the private sector can provide the scale of investment required to deliver the government’s growth agenda.
“To achieve this shared mission of growing our economy sustainably, it’s vital that the government doubles down on its partnership with business to unlock the investment that is needed to drive opportunity around the UK.”
FSB: Employment allowance rise welcome from Chancellor in tax-raising Budget
The Federation of Small Businesses responds to the Chancellor’s Budget statement
Responding to the Chancellor’s Budget statement, Policy Chair of the Federation of Small Businesses (FSB), Tina McKenzie, said: “Increasing the employment allowance for small businesses by a record amount is a very welcome move and we’re pleased the Chancellor has heard us loud and clear.
“More than doubling it, from £5,000 to £10,500, will shield the smallest employers from the jobs tax, therefore is a pro-jobs prioritisation in a tough Budget.
“The decision to protect small businesses from an inflationary hike in business rates – by freezing the small business multiplier – will help small firms with premises across all sectors. Meanwhile, extending business rates relief, albeit at a lower level, for small firms in retail, hospitality and leisure will mitigate a potential cliff-edge tax hike for those in some of the toughest sectors.
“The true test of today’s Budget will be whether small businesses can grow and end the economic stagnation the UK has been stuck in.
“Larger small, and medium-sized, businesses will struggle with the rises on employer national insurance on top of the large costs from the Government’s employment law plans. We’ve been very clear in our warning of the difficulty SMEs will be confronted with in meeting all of these changes at once – and the potential impact on jobs, wages and prices.
“The Budget documents include plans for a small business strategy command paper, which is a welcome signal that ministers appreciate the central role that small businesses play in driving growth and we look forward to working with the Government closely on that.
“Investment in infrastructure is key to future growth, and the Chancellor’s announcement of additional funding for rail projects and fixing potholes is therefore encouraging. Many small firms, meanwhile, will be relieved at the decision not to raise fuel duty. The commitment to prioritise small housebuilders when it comes to housing investment is also welcome.
“Building a business involves a significant element of risk and personal, as well as financial, investment. But for the economy to grow, we need more people to be incentivised to take that leap and, in turn, create jobs, opportunities and prosperity in all communities across the country.
“The right decision has been taken to retain entrepreneurs’ relief (now branded Business Asset Disposal Relief) up to £1million, which is something we have campaigned hard for. Although the level of relief will gradually reduce over time, resulting in more tax being paid in the future on business sales, we’re pleased to see a differential has been kept.
“Against a challenging backdrop, today’s Budget shows a clear direction in business policy now for the whole of this Parliament to target support at small businesses, rather than big corporates – prioritising everyday entrepreneurs working in local communities in all parts of the country.”
UK Budget fails “3 Key Tests for Scotland”, say Alba Party
Scottish Government must now fund universal entitlement to pensioners winter fuel payment
“To gain pass marks the new UK Labour Government had three key tests to meet in Scotland: it had to reverse its plan to cut the universal winter fuel payment; it had to save Grangemouth; and it had to fund a plan to save North Sea Oil and Gas jobs – on all three counts Labour has failed Scotland.”
This was said today by Acting Alba Party leader Kenny MacAskill reacting to Chancellor Rachel Reeves’ budget.
Alba Party say that the UK Government had three key tests to meet to deliver for Scotland. Former First Minister Alex Salmond helped launch a campaign to save the winter fuel payment last month.
Close to one million pensioners in Scotland are set to lose out on between £200-£300 this winter. Acting Alba Party leader Kenny MacAskill has been a leading voice in the campaign to save the Grangemouth Oil Refinery from closure.
Mr MacAskill has today hit out at the UK Government after Labour promised in the General Election to save Scotland’s only refinery that is set for closure next year but has failed to provide funding to save the refinery in today’s budget.
MacAskill has now called on the Scottish Government to use extra Barnett consequential funding to fully mitigate the cut to the winter fuel payment.
Alba Party have also hit out as successive UK Government’s have promised investment in Carbon Capture Technology in the North East of Scotland. Alba say the technology is vital to secure the future of the North Sea Oil and Gas industry and to help Scotland play its part in protecting the environment. Today’s UK Budget confirmed £22billion of investment in carbon capture projects in England – but snubbed the Acorn project on the Buchan coast.
Commenting Acting Alba Party leader Kenny MacAskill said: ““Today’s UK Budget is a continuity budget that proves that regardless of whether we have a UK Tory Government or a UK Labour Government, Scotland will always lose.
“To gain pass marks the new UK Labour Government had three key tests to meet in Scotland: it had to reverse its plan to cut the universal winter fuel payment; it had to save Grangemouth; and it had to fund a plan to save North Sea Oil and Gas jobs – on all three counts Labour has failed Scotland.
“ Close to a million Scottish pensioners are to be kept in the cold this winter, the UK Government has chosen to stand by and allow Scotland’s key industrial asset to close, and Labour have betrayed the North East of Scotland.
“ Nothing for Scotland’s pensioners, nothing for Grangemouth and nothing for Carbon Capture and the North Sea. It is now vital that the Scottish Government steps up to the plate and uses any additional funding consequentials it receives to fully mitigate the cut to the winter fuel payment.”
Budget is a ‘Missed Opportunity’
The budget is a missed opportunity to bring about the transformative change this country needs, said Westminster’s group of independent MPs.
A statement from the Independent Alliance:
LOCAL GOVERNMENT INFORMATION UNIT:
Dr Jonathan Carr-West, Chief Executive, LGIU, said: “The Chancellor billed this as an historically consequential budget of hard choices. That’s certainly true in many areas with £40bn of tax rises announced and significant changes to the government’s debt rules.
“For local government, however, it is a budget of choices deferred. It could have been worse – there’s an additional £1.3bn in funding including money for social care and additional funding for housing and special educational needs: the very areas that are driving many councils to bankruptcy.
“But this extra funding is not even half the gap that councils currently face.
“The longer-tem change that the sector desperately needs is all deferred for now. We are waiting on the Local Government Finance Settlement, on the Devolution White Paper and on a broader redistribution of funding through a multi-year settlement from 2026-27.
“There were some welcome highlights: retaining 100% of right to buy receipts and integrated settlements for Greater Manchester and the West Midlands and possibly for other places in future.
“Is this a start? Yes. Is it enough? Not by a long shot. At least not yet. There’s a positive direction of travel set out, but there’s a long way to go and the pressure on council finances means there’s a real risk that some councils will not be able to hang on long enough to get there.”
Chancellor announces pay rise for over 3 million workers next year, as National Living Wage rises by 6.7%
Pay boost worth £1,400 a year for an eligible full-time worker – a significant move towards delivering a genuine living wage.
18-20 National Minimum Wage will rise by £1.40 per hour – the largest increase on record – and marks first step towards a single adult rate.
Over 3 million workers will receive a pay boost after the Chancellor confirmed the National Living Wage will increase from £11.44 to £12.21 an hour from April 2025.
The 6.7% increase – which is worth £1,400 a year for an eligible full-time worker – is a significant step towards delivering the manifesto commitment to make sure the minimum wage is a genuine living wage.
The National Minimum Wage for 18 to 20-year-olds will also rise from £8.60 to £10.00 an hour – the largest increase in the rate on record. This £1.40 increase will mean full-time younger workers eligible for the rate will see their pay boosted by £2,500 next year. This marks the first step towards aligning the National Minimum Wage and National Living Wage to create a single adult wage rate, which would take place over time.
The move comes ahead of today’s Budget which will ‘fix the foundations’ to deliver change by fixing the NHS and rebuilding Britain, while ensuring working people don’t face higher taxes in their payslips.
It builds on the commitment to be a pro-business, pro-worker, pro-growth Government – delivering a key plank of the Plan to Make Work Pay, which is already set to boost the pockets of the lowest-paid workers by up to £600 a year through the Employment Rights Bill.
The plan will boost productivity, creating a workforce that is fit and ready to help us deliver our first mission to kickstart economic growth – with good jobs and growth in every part of the country making everyone, not just a few, better off.
Chancellor of the Exchequer Rachel Reeves said:“This Government promised a genuine living wage for working people.
“This pay boost for millions of workers is a significant step towards delivering on that promise.”
Business Secretary, Jonathan Reynolds said: “Good work and fair wages are in the interest of British business as much as British workers.
“This government is changing people’s lives for the better because we know that investing in the workforce leads to better productivity, better resilience and ultimately a stronger economy primed for growth.”
Deputy Prime Minister, Angela Rayner said: ““A proper day’s work deserves a proper day’s pay.
“Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18–20-year-olds on record.”
The minimum hourly wage for an apprentice is also boosted next year, with an 18-year-old apprentice in an industry like construction seeing their minimum hourly pay increase by 18.0%, a pay bump from £6.40 to £7.55 an hour.
These increases will mean 3.5 million workers will receive a pay rise this year in total. They confirm the Low Pay Commission’s recommendations, whose advisory remit was overhauled by ministers in July to consider the cost of living.
Ethics Director at Lush Cosmetics, Hilary Jones said: ““Lush staff making and selling our products are crucial to our success, so we commit to the Living Wage Foundation’s independently calculated real living wage rates each year to feel confident our rates of pay are fair and that our staff can afford what they need to thrive, not just survive.
“In these tough times where the cost of living continues to rise, it is great to see the Government increase minimum wage closer to these calculations to support the hardest working and most vulnerable workers across the UK.”
Chair of the Low Pay Commission, Baroness Philippa Stroud said:“The Government have been clear about their ambitions for the National Minimum Wage and its importance in supporting workers’ living standards.
“At the same time, employers have had to deal with the adult rate rising over 20 per cent in two years, and the challenges that has created alongside other pressures to their cost base.
“It is our job to balance these considerations, ensuring the NLW provides a fair wage for the lowest-paid workers while taking account of economic factors. These rates secure a real-terms pay increase for the lowest-paid workers. Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time.”
Good news for low paid workers, then. but some businesses – small businesses remain the bedrock of the UK economy – point out that it’s not the government that will be paying the pay rises, it’s them.
Coming on top of the likely increase in employers National Insurance contributions likely to be announced today they say that these additional costs could force some small businesses, working on small profit margins, to close.
Chancellor confirms the NHS will receive funding needed to deliver extra 40,000 elective appointments per week
Chancellor and Health Secretary confirm funding plans to increase elective appointments ahead of the Budget tomorrow.
New funding and reform puts the NHS on course to reduce waiting lists.
Additional capital investment will further support reduced waiting times, with £1.5bn for new surgical hubs and scanners, alongside £70 million for new radiotherapy machines.
Funding to support the delivery of an extra two million NHS operations, scans and appointments a year to significantly cut waiting lists across England has been announced by the Chancellor and Health Secretary today. This comes following over a decade of neglect and underinvestment of the NHS.
Ahead of her Budget on Wednesday, the Chancellor has confirmed that the NHS will receive the funding needed to deliver an extra 40,000 elective appointments per week, delivering on one of the Government’s First Steps in office to reduce waiting times in the NHS. This includes an additional £1.8bn the government has invested in elective activity this year since the July Statement.
This will be supported by a significant uplift of capital investment, with new capacity including surgical hubs and scanners, meaning thousands of additional procedures and millions of diagnostic tests across the country, alongside funding for new radiotherapy machines to improve cancer treatment.
In his recent independent investigation into the NHS in England, Lord Darzi highlighted that the NHS is in “critical condition”. Patients across England are waiting too long, with the waiting list at over 7.6 million in August. In the same month, over 280,000 had been waiting for an operation, scan or appointment for over a year.
Today’s announcement is an integral step in reducing the waiting list and puts the NHS on course to meet the commitment that 92% of people wait less than 18 weeks to start treatment in the NHS.
The Chancellor’s budget tomorrow will set out how this government will fix the foundations to deliver change, by fixing the NHS and rebuilding Britain, while ensuring working people don’t face higher taxes in their payslips.
It will focus on “investment, investment, investment” in order to get the economy moving again and demonstrate how this government will take the long-term decisions needed to grow the economy and restore the country’s public services.
Chancellor of the Exchequer Rachel Reeves said: “Our NHS is the lifeblood of Britain. It exemplifies public services at their best, there for us when we need it and free at the point of use, for everyone in this country.
“That’s why I am putting an end to the neglect and underinvestment it has seen for over a decade now.
“We will be known as the government that took the NHS from its worst crisis in its history, got it back on its feet again and made it fit for the bright future ahead of it.”
Health and Social Care Secretary Wes Streeting said: “Our NHS is broken, but it’s not beaten, and this Budget is the moment we start to fix it.
“The Chancellor is backing the NHS with new investment to cut waiting lists, which stand at an unacceptable 7.6 million today. Alongside extra funding, we’re sending crack teams of top surgeons to hospitals across the country, to reform how they run their surgeries, treat more patients, and make the money go further.”
Building an NHS fit for the future is one of this Government’s five priority missions; but it is clear that alongside sustainable investment, the NHS will need significant reform across the board to be truly transformed.
The Chancellor has therefore confirmed an ambitious reform programme across health and social care in England, including reforming the delivery of elective activity and patient pathways. Billions of pounds are set to be invested in technology and digital innovations across the NHS to boost productivity and unlock significant savings for the NHS in the long-term.
The funding comes after the Government last week launched ‘Change NHS: help build a health service fit for the future’, a national conversation to help develop the 10 Year Health Plan, which will set out our long-term vision for health and the path to delivering the three shifts to reform and transform health: hospital to community, analogue to digital, and sickness to prevention.
Starting this week, the NHS will help people back to health and back to work by sending teams of top clinicians to hospitals across the country to help roll out reforms to cut waiting lists in hospitals – which will start with those in areas of the highest economic inactivity.
