Chancellor Rachel Reeves will present Labour’s first Budget in 14 years on Wednesday, October 30. She has indicated that the Budget will require “difficult decisions.” According to government sources, the Chancellor may propose tax increases and spending cuts totaling approximately £40 billion.

Each year, the Chancellor outlines fiscal policies in a Budget statement to Members of Parliament in the House of Commons. This statement details plans for tax adjustments and significant spending decisions affecting essential services like healthcare, education, and law enforcement. The last Budget was delivered by former Conservative Chancellor Jeremy Hunt in March, just before the general election. Following a change in government, the new Chancellor will set out their priorities through this Budget.

The upcoming autumn Budget is scheduled to begin around 12:30 PM UK time and typically lasts about an hour. It will be streamed live via BBC iPlayer and the BBC News website. Rishi Sunak, the leader of the opposition Conservative Party, is expected to respond shortly after Reeves concludes her speech.

Labour has consistently emphasized the need for tough fiscal choices since taking office in July. Reeves has described inheriting a challenging financial situation, a claim contested by Conservatives. She aims to address the anticipated £40 billion gap primarily through tax hikes rather than spending reductions, asserting there will be “no return to austerity.” She also intends to adhere strictly to funding daily operations through tax revenues without increasing borrowing.

However, investment strategies may differ; Reeves hinted at redefining government debt regulations that could allow an additional £50 billion in borrowing for large-scale infrastructure projects like roads and hospitals.

During the last election campaign, Labour committed to refraining from raising taxes on working individuals and pledged not to increase VAT, income tax, or National Insurance (NI) contributions. Nevertheless, speculation surrounds several potential measures:

• An increase in employer NI contributions could be on the table.
• Income tax and NI thresholds may remain frozen beyond their anticipated rise in 2028.
• Changes to inheritance tax exemptions are under consideration.
• Capital gains tax rates could be adjusted for higher earners.
• Adjustments to pension taxation might be proposed.
• The stamp duty thresholds could revert after March 2025 unless extended by Labour.
• Plans regarding non-dom tax status may be revised amid revenue concerns.
• Fuel duty rates have not seen an increase recently; some advocates argue for a reversal of past cuts.
• An anticipated rise in minimum wage rates is expected alongside adjustments to winter fuel payments.
• The state pension is projected to increase by 4% next April.
• VAT will apply to private school fees starting January 1.
• The windfall tax on oil and gas profits is set to rise as well.

The Treasury will release a report detailing these proposals alongside Reeves' speech. MPs will debate the suggested measures before voting on them as part of a Finance Bill aimed at enacting the Budget’s provisions into law.