The Budget: October 2024

Chancellor Rachel Reeves presented her first Budget earlier today to a mixed reception. Just some of the measures affecting businesses include:

  • Legal minimum wage for over-21s to rise from £11.44 to £12.21 per hour from April 2025
  • Rate for 18 to 20-year-olds to go up from £8.60 to £10, as part of a long-term plan to move towards a “single adult rate
  • Firms to pay National Insurance on workers’ earnings above £5,000 from April, down from £9,100 currently, with the rate increasing from 13.8% to 15%
  • Employment allowance – which allows businesses to reduce their NI liability – to increase from £5,000 to £10,500
  • £2 cap on single bus fares in England to rise to £3 from January (may affect local town centre footfall)
  • 5p cut to fuel duty on petrol and diesel, due to end in April 2025, kept for another year

The Office for Budget Responsibility predicts the UK economy will grow by 1.1% this year, 2% next year, and 1.8% in 2026 – pretty underwhelming figures when you think this budget was billed as ‘A Budget for Growth.”  Inflation is also predicted to average 2.5% this year, 2.6% next year, before falling to 2.3% in 2026. As we all know, forecasting is easy until you try to predict the future!

Useful Budget Summaries can be found on the BBC News Website and the House of Commons Library, and the full Policy Paper is available at GOV.UK