Rachel Reeves has revealed plans to implement tax increases amounting to £26 billion annually in a leaked Budget announcement. The new measures include a mansion tax on properties exceeding £2 million and the removal of the controversial two-child benefit limit. Additionally, income tax thresholds will be frozen, affecting over 1.5 million workers, while the gambling industry will face increased levies.
During a tumultuous session in the House of Commons, Ms. Reeves defended her decisions, stating they are aimed at creating a fairer and more secure Britain. The Budget also introduces a council tax surcharge for high-value properties over £2 million, expected to generate approximately £400 million per year.
Further changes include the elimination of the two-child benefit limit, a move applauded by anti-poverty advocates. The Budget also outlines adjustments to gambling taxes, with the aim of raising £1.1 billion by 2029-30. Rail fares will be frozen for the first time in three decades, benefiting millions of passengers.
Moreover, income tax thresholds will remain frozen until 2030, resulting in more individuals moving into higher tax brackets as their incomes rise. The Budget also introduces a new tax on electric and plug-in hybrid cars, forecasted to generate £1.4 billion for the Treasury.
Ms. Reeves emphasized a commitment to cutting energy bills, with an average household expected to save £150 starting in April. Pensioners will receive a boost of around £550 per year through an increase in the state pension. Additionally, the Budget includes pay raises for over 2.7 million workers, with the National Living Wage set to rise to £12.71 per hour for individuals over 21.
Other notable changes encompass adjustments to pension contributions taxation, the widening of the tax on sugary drinks, and modifications to the cash ISA limit. The Budget also introduces a new tax on overnight stays in accommodations to address obesity concerns.
Ms. Reeves pledged a £300 million investment in NHS technology and the establishment of 250 new neighborhood health centers. Moreover, funding has been allocated for the Lower Thames Crossing project and various transport infrastructure upgrades.
These Budget announcements aim to reshape the UK’s financial landscape and tackle key societal challenges while fostering economic stability and fairness.