Rachel Reeves has revealed plans for £26 billion per year in tax increases in a Budget that was leaked just before its official release. The Chancellor introduced a new mansion tax affecting properties valued over £2 million and announced the removal of the two-child benefit limit, a decision long awaited by anti-poverty advocates.
Additionally, income tax thresholds will be frozen, impacting over 1.5 million workers. The gambling industry will face new levies, while fuel duty will remain unchanged until the following year, as stated by Ms. Reeves during a lively session in the House of Commons, where she defended her choices as necessary for a fairer and more secure Britain.
The Budget also includes a high-value council tax surcharge on homes exceeding £2 million, estimated to affect between 100,000 and 200,000 properties. The charge will range from £2,500 to £7,500 annually, aiming to generate approximately £400 million for the Treasury each year.
Furthermore, the Chancellor scrapped the two-child benefit cap, a policy criticized for exacerbating child poverty, with an estimated cost of £3 billion by 2029-30. In response to demands from Labour MPs and former Prime Minister Gordon Brown, benefits will be updated in line with inflation starting in April.
Reeves announced a £1.1 billion plan to reform gambling taxes, including raising the remote gaming duty and introducing a new general betting duty. The measures are anticipated to bring in £1.1 billion by 2029-30, with the removal of Bingo Duty receiving cheers from the audience.
Other notable Budget changes include the first rail fare freeze in three decades, a freeze on income tax thresholds until 2030, a new mileage-based charge on electric vehicles, a reduction of £150 in average household energy bills, and a boost in the state pension by about £550 per year from April.
Moreover, the Budget addresses wage increases for approximately 2.7 million workers, with the National Living Wage set to rise to £12.71 per hour. Changes to national insurance contributions on salary-sacrificed pensions, a widened tax on sugary drinks, and adjustments to cash ISA limits were also outlined in the Budget.
Finally, investments in NHS technology, the Lower Thames Crossing project, and regional transportation upgrades were confirmed by Ms. Reeves, emphasizing the Labour Party’s commitment to enhancing public services and infrastructure.