Chancellor Rachel Reeves is preparing to present the first Labour Budget in a generation, which is expected to have a significant impact on the people of Northern Ireland. Despite assuring that there will be no return to austerity, she has suggested that tough decisions will need to be made regarding spending, welfare, and taxes. One of the proposed measures is an increase in the minimum wage to £12.21 per hour, with a promise not to raise headline taxes such as national insurance, VAT, and income tax on working people. The announcement is scheduled for 12:30 pm, and here are eight key points to watch out for.
One of the areas that could see changes is inheritance tax, currently set at a 40% rate and applicable to individuals with an estate worth £325,000 or more. This threshold increases to £500,000 if the property is passed down to a child or grandchild, allowing couples to have a combined tax-free property limit of £1 million. Only 3.7% of deaths in 2020-21 resulted in an inheritance tax charge, according to government data. Chancellor Reeves is reportedly considering raising the 40% rate and potentially limiting relief or exemptions on certain inherited assets.
In addition to potential changes to inheritance tax, there is speculation about what other measures the Budget may contain. While the Chancellor has emphasized that there will be no austerity, difficult choices will need to be made regarding spending, welfare, and taxes. One confirmed proposal is a historic pay rise for millions of low-paid workers, with the national minimum wage set to increase by 6.7% from April 2025. This means that the minimum wage for individuals over 21 will rise from £11.44 to £12.21 per hour, resulting in an annual increase of £1,400 for full-time employees.
The Budget announcement will also address future Winter Fuel Payments, which will now be limited to individuals receiving pension credit or other means-tested support. This policy aligns with the UK Government’s decision and applies to Northern Ireland as well. For real-time updates on the Budget announcement, you can follow the live feed below or visit our homepage for the latest headlines. To stay informed about political news and analysis from Belfast Live, consider signing up for our Party Lines newsletter.
As the Budget unfolds, it will be crucial to pay attention to how these proposed changes will impact individuals across various sectors and income brackets. The decisions made by Chancellor Reeves will shape the economic landscape and social welfare policies for the foreseeable future. Stay tuned for more updates and analysis on the implications of the Labour Budget for Northern Ireland and the wider UK.