Chancellor Rachel Reeves is delivering Labour’s first Budget in 14 years.
The UK’s first female chancellor rose to her feet at 12.34pm to announce the first Labour budget since Alistair Darling in 2010.
She has promised to put “more pounds in people’s pockets”.
But commitments not to increase income tax or national insurance on employees are likely to see companies hit with a greater share of the burden to help repair the nation’s finances and fund stretched public services.
It comes after she received a mixed response after confirming that the minimum wage in the UK will rise by 6.7% to £12.21 an hour next year.
While welcomed generally, some of those in Northern Ireland warned against dramatic changes which would particularly impact smaller businesses here.
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NI Executive to receive £1.5bn
Tax thresholds to rise
‘A penny off a pint in the pub’
No increase on fuel costs
NI Executive to receive £1.5bn
At PMQs before the Budget announcement, Sir Keir Starmer answered Rishi Sunak’s question about a commitment to keeping Stormont open, by saying: “I absolutely agree that the institutions at Stormont need to be up and running. I want to give all support I can to the further development in Northern Ireland.”
“As well as good news on revived City Deals, Chancellor Rachel Reeves has announced £1.5bn for the NI Executive. It’s a tradition now for news desks to receive some trenchant analysis in late afternoon on Budget day from the NI Department of Finance on what the funding really means, and whether it’s new money or not. Today will be no different!”Margaret Canning, Belfast Telegraph Business Editor
City Growth Deals to go ahead
“The Chancellor has come to the rescue of Northern Ireland City Deals in the Mid South West Region and Causeway Coast and Glens. Relief all round for those regions.”Margaret Canning, Belfast Telegraph Business Editor
“Farming communities in Northern Ireland – of which here are many – will have been listening out today for news on inheritance tax (IHT) relief on farms, which had been tipped for reform. There has been an announcement on reform of both Agricultural Property Relief and Business Property Relief. From April 2026, the first £1m of business and agri assets will be exempt from IHT, but for those over £1m, IHT will apply with 50% relief – amounting to an effective rate of 20% ”Margaret Canning, Belfast Telegraph Business Editor
Tax thresholds to rise
“Big rabbit from that Chancellor hat! There won’t be a continuation of the freezes in employee national insurance and personal tax thresholds. In previous years, those freezes had meant that many of us were dragged into higher tax thresholds as wages rose in line with inflation. ”Margaret Canning, Belfast Telegraph Business Editor
‘A penny off a pint in the pub’
“Small businesses will feel the pinch more from today’s Budget than larger companies. For the latter, there’s good news in the form of the Chancellor’s corporate tax road map, confirming capping rate of corporation tax at 25% for duration of this Parliament. Good news for Northern Ireland’s cohort of big companies. ”Margaret Canning, Belfast Telegraph Business Editor
40% relief in business rates
‘Flat rate duty’ on vapes
Capital gains tax will increase
“Looks like those business owners who rushed to sell their companies in advance of today’s Budget made the right move. The Chancellor has hiked capital gains tax, as forecast, with the lower rate rising from 10% to 18% and the higher rate from 20% to 24%. These are measures which will hit business owners and serial entrepreneurs, but there’s no arguing they’ll also raise significant revenue. Measures like this were inevitable if the Chancellor was to stick to the Labour Party’s pledge not to increase employee national insurance, Vat, corporation tax or income tax.”Margaret Canning, Belfast Telegraph Business Editor
National Insurance contributions to rise
“The most painful element of today’s Budget, a 1.2 percentage point increase in rate of employer national insurance contributions to 5%, and the threshold lowered from £9,100 to £5,000. Chancellor says the measure will raise £25bn. “I do not take this decision lightly.” It won’t sit lightly on the minds of many small business owners tonight!”Margaret Canning, Belfast Telegraph Business Editor
No increase on fuel costs
“Freezing fuel duty and retaining 5% discount is expensive… but Ms Reeves says lifting the freeze is not the right thing to do. “There will be no higher taxes at the petrol pumps next year”.”Margaret Canning, Belfast Telegraph Business Editor
Weekly earnings limit for carers allowance will rise
“National living wage going up by 6.7% to £12.21 an hour. It’s really welcome news for workers, but it can’t be denied small business owners are going to find it difficult. That’s particularly true in narrow-margin sectors like hospitality. The Low Pay Commission has been urged to monitor the impact of higher minimum wage rates on employment, including whether firms start to switch to self-employed labour so that they can avoid the rising cost of employment. ”Margaret Canning, Belfast Telegraph Business Editor
Labour working to ‘develop’ city growth deals
“We are working with the devolved governments and partnering with our mayors to develop local growth plans,” said Ms Reeves.
The deals relate to a package of extra funding worth over £1bn and decision-making powers negotiated between central Government and local councils.
“Chancellor has announced 2% efficiency targets for all government departments to meet, and a new unit to crack down on companies who profited unfairly from emergency funding during Covid-19. And there’s a new crackdown on benefit fraudsters, along with a drive to reduce economic inactivity and Neets. Economic inactivity has of course been a long-term drag on the economy here in NI. ”Margaret Canning, Belfast Telegraph Business Editor
Government borrowing expected to reach £127 billion
Budget to raise taxes by £40 billion
“Any Chancellor would have to face this reality,” she said. “And any responsible Chancellor would take action.”
“Chancellor emphasising that her Budget is about breaking with the past and the “short-termism” of former budget announcements. No more borrowing to fund day to day spending, which is a big break with how things have been done before. ”Margaret Canning, Belfast Telegraph Business Editor
Infected blood and Post Office scandals victims to be compensated
“Two years ago, then-Chancellor Kwasi Kwarteng and then-PM Liz Truss unleashed chaos on the markets with their mini-budget. In the process, they rubbished the Bank of England and the Office for Budget Responsibility. But Chancellor Rachel Reeeves is breaking firmly with that past, with her thanks to both institutions. And there’s a tongue-in-cheek reference from RR to a recent KK interview in which he said the mini-budget wasn’t perfect. ”Margaret Canning, Belfast Telegraph Business Editor