Rachel Reeves is set to deliver tax rises and spending cuts as she vows to use her first Budget to “rebuild Britain” after the mess left behind by the Tories.
Despite raising some taxes to fill the £22billion blackhole she said the government inherited from the Conservatives, she will also promise to fix public services such as the NHS and pour billions of pounds into the health service to cut waiting lists.
Ms Reeves is also set to announce an increase in the defence budget for next year, part of which will be used to give soldiers a pay rise backdated to April. The funding will also be used to buy weapons, with the aim of replenishing stockpiles depleted by donations to Ukraine.
Other policies discussed in today’s Budget will include changes to borrowing rules, new funding to get people back to work and VAT on private school fees in order to fund extra teachers across England. It is expected the move will raise £1.5billion, according to the Institute for Fiscal Studies (IFS) think-tank.
Earlier this week, Prime Minister Keir Starmer that the £2 bus fare cap across England will rise to £3. The government said the new price hike will give local authorities more cash to bring in new bus routes, make services more frequent and protect crucial services for local communities.
The PM insisted there will be no “short cuts” in rebuilding Britain after 14 years of Tory rule – but promised the country “better days are ahead”. In a major speech this week, the PM said: “We are turning the page on Tory decline, closing the book on their austerity and chaos. Those days are done, they are behind us, change is here.”
What is the Budget?
The Budget is a statement made to MPs presenting any changes to tax and spending. On the same day, the Office for Budget Responsibility (OBR) publishes its independent analysis of the UK economy.
The Treasury publishes a report alongside of its Budget with further detail on the decisions made and how much everything costs. The Chancellor makes the statement to MPs in the House of Commons.
It is usually a lively affair as the chamber is full of politicians groaning or cheering depending on the announcements made.
After the Chancellor’s speech, MPs may need to approve any immediate changes to taxes. There is then a debate in the chamber that usually lasts four days.
After the date, MPs are asked to agree to resolutions to approve tax proposals. Finally, a Finance Bill which gives permanent legal power to the Budget’s plans is introduced.
When is the Budget?
Chancellor Rachel Reeves will take to the despatch box in the House of Commons at 12:30pm today to set out the next year’s plan for the Treasury.
The Budget statement will take place after Keir Starmer takes part in his weekly Prime Minister’s Questions session in the Commons chamber.
It is a major opportunity for Labour to set out its plan for the country after being elected to Government in July.