Labour’s first budget in 14 years, the Autumn Budget of 2024, will be presented before the Parliament at around 12:30 GMT today, 30 October. Chancellor Rachel Reeves is expected to deliver big changes, such as anticipated hikes to several taxes and spending cuts, in the budget statement itself. But the Labour government has announced some changes on several previous occasions. Come along as we explore some pre-announced changes.
What Are the Pre-Announced Changes?
Here are some of the pre-announced changes:
1. State Pension
The amount of State Pension a taxpayer gets depends on their National Insurance record. State Pension increases each year by whichever is the highest:
- The average percentage of growth in wages
- The percentage growth in prices in the UK measured by the Consumer Price Index (CPI)
- 2.5%
Labour government is set to raise the State Pension by 4.1% in April 2025.
2. VAT on Private Schools
School fees were previously VAT exempt. However, the Labour government has decided to apply VAT to private schools. This announcement was one of the first after Labour took power. All private schools will be subject to VAT from 1 January. Also, some private schools will lose business rates relief.
The government has said that the revenue generated from this VAT will be used to recruit more teachers.
3. Minimum Wage
The Labour government has also decided to raise the minimum wage of workers in the UK. The minimum wage for people over 21 was set at £11.44 per hour. Now, it will be raised to £12.21 per hour, which will come into effect in April 2025. It is also worth noting that employees in the age group 18 to 20 and apprentices will also see an increase in their minimum wage.
Conclusion
In anticipation of the Autumn Budget 2024, Labour has already signalled its approach to social and economic reforms. While the Chancellor’s full budget statement will disclose the complete fiscal strategy, these pre-announced measures give a clear indication of the government’s direction. As we await further details, it is evident that Labour’s first budget in over a decade will focus on long-term economic stability in the UK.
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