BUDGET | Main takeaways as Reeves promises to rebuild economy
Citing Labour’s “overhaul” of the planning system as proof that this government is an agent of change, chancellor Rachel Reeves was borderline buoyant throughout her Budget speech despite the early release of the Office for Budget Responsibility’s report stealing much of her thunder.
Reeves told the Commons that her Budget would “cut debt, cut borrowing, cut the cost of living, and cut NHS wait times”.
Her Budget will increase borrowing by £5bn on average over the next three years and reduce it by £13bn on average for the two years after, according to the Office for Budget Responsibility.
Conservative Party Leader Kemi Badenoch was not impressed, calling for Reeves to resign and describing the Budget as a “smorgasbord of misery”.
OBR on housing
Reeves was right to celebrate the impact of planning reforms, according to the OBR’s analysis. The agency predicts that while the number of new homes being built will fall from 260,000 a year in the early 2020s to 215,000 in 2026-27; it will increase to an average of 305,000 being delivered in 2029-2030.
Meantime, the average house price is expected to rise from £260,000 in 2024 to just under £305,000 in 2030.
Residential investment is forecasted to grow from 1% this year to 7% in 2027 and 2028, shrinking to 2% by 2030 after the initial impacts of the planning reforms fade.
What the Budget means for the built environment in the North and Midlands
Planning and skills
A promise to boost planning capacity is one of the main takeaways for the built environment from the Budget. Reeves will be investing £48m to recruit 350 planners, accomplishing this by expanding the Pathways to Planning Graduate Scheme and creating a Planning Careers Hub.
The Budget claims that by doing this, and funding improvements for environmental regulators, the number of recruits for the planning system will be 1,400 by the end of this Parliament.
Reeves also committed £725m for the Growth and Skills Levy to support apprenticeships. This includes fully funding apprenticeships for those under 25 years of age.
Neighbourhood health centres
Reeves promised 250 new neighbourhood health centres in the UK – of which 120 are due to open by 2030. This number includes a refurbished Alfred Barrow Health Centre in Barrow-in-Furness, according to Budget documents, as well as Stockland Green and Summerfield Primary Care Centres in Birmingham.
Mansion taxes
Starting in 2028, Reeves will introduce a high-value council tax surcharge in England. This will put an additional £2,500 charge on properties worth more than £2m, and £7,000 for those worth more than £5m. She said that this would raise £400m by 2031 and only impact the top 1% of properties. To justify the project, she evoked the North-South divide – speaking about how a resident of Blackpool may pay more in council tax than someone living in a Mayfair mansion.
Business rates
Retail, hospitality, and leisure operators will no doubt be breathing a sigh of relief after hearing that their business rates will be permanently lowered. Reeves said this would impact 750,000 properties.
The Budget outlines how it will look in practice – with RHL multipliers being reduced to 5p below national equivalents. This will put the small business RHL multiplier at 38.p and the standard RHL multiplier at 43p in 2026-27, the lowest tax rate since 1990-91 for small businesses and 2010-11 for standard properties.
This will be funded by making the multiplier rate up to 10p higher than the national standard for properties worth more than £500,000. However, Reeves’ Treasury will only put the rate up 2.8p above the national standard multiplier “in recognition of the important role these properties play in the government’s growth mission,” according to the Budget.
Reeves also committed to establishing the Leeds City Fund, which will support development in the city through a business rates retention zone in the city centre. Leeds City Council will be able to retain 10% of business rates growth above an agreed baseline for 25 years as part of this agreement.
The government is also exploring creating business rate retention zones in South Yorkshire and the North East.
Liverpool City Region Combined Authority’s business rates retention pilot was also extended through 2029.
The Treasury said that the business rates support package in the budget was worth £4.3bn.
Devolution flexes
It was a big day for the mayors. Reeves said that she was devolving £13bn in flex funding for mayors to invest in skills, business support, and infrastructure.
This is in addition to the £1.3bn in the budget for the National Housing Delivery Fund – which is going towards Greater Manchester, Liverpool City Region, North East, South Yorkshire, West Yorkshire, and the West Midlands. These funds will go to support projects such as Liverpool Central Docks and Forth Yards in Newcastle.
The Budget also builds upon the earlier announced Pride in Place with £902m over the span of four years to be spent on local growth funds. There will also be a £500m Mayoral Revolving Growth Fund for mayors in the North and Midlands through an integrated settlement.
These mayors will also be able to bid for money from the £7bn successor to the Affordable Homes Programme.
Electric vehicles
The Budget includes £200m for EV charging infrastructure as well as a promise for 100% business rates relief for EV charging points over the next decade.
However, it’s not all good news for electric vehicles. Reeves promised to introduce an Electric Vehicle Excise Duty, a mileage charge for EVs and plug-in hybrids. This would be effective from April 2028.
Landfill tax row back
Reeves abandoned plans to change the way landfill tax is conducted. Earlier in the year, the government had consulted on changing the two-rate system to a single one. The current system has a standard rate of £126.15/tonne and another of £4.05/tonne for less harmful materials.
Instead, the government said it would change its approach to landfill tax to ensure changes were “proportionate, do not impose unavoidable costs on businesses, and do not undermine the government’s target of building 1.5m new homes in England”.
The Budget adds that a tax exemption for backfilling quarries will be maintained.
Warm Homes boost
The government is investing an additional £1.5bn into the Warm Homes Plan, which helps homeowners improve the energy efficiency of their property. This is in addition to the £13.2bn promised in the Spending Review for the program.
Minimum Wage increase
The National Minimum Wage for 18-20 year olds will increase 8.5% to £10.85/hr, while apprentices and 16-17 year olds will see their minimum wage increase 6% to £8/hr. As of April 2026, the National Living Wage will be £12.71/hr.
Leeds love
Is there a Northern city more beloved than Leeds in this Budget? The answer is no. Leeds got a whopping 18 mentions, with the Budget referencing its likely new town (Leeds South Bank), the creation of Leeds City Fund, and a promise to headquarter the new National Housing Bank in the city. Oh, and the Budget reminded readers that the government had provided the £45m that is being used to create the multi-modal gateway at Leeds Rail Station. Manchester received only 10 references, Liverpool 12, and Newcastle 2. Birmingham had five nods, of which one was a footnote.
Northern Powerhouse Rail?
Alas, those hoping for a surprise commitment for Northern Powerhouse Rail were left disappointed. Reeves said she was supportive of the idea in her Budget speech, but the rail link is nowhere to be found in the Budget document itself.
New towns missing
The House of Lords’ recommendation to build new towns into the Budget was ignored by Reeves. While the programme got a nod, the most it got in terms of a financing programme was this: “The government will continue to consider the ways in which private finance can support the delivery of wider infrastructure ambitions, including leveraging private finance to help deliver the next generation of new towns.”
Related Articles
Analysis
North West developments to watch out for in 2026
As the page turns to 2026, the region remains the country’s benchmark for regional development and regeneration. More is on the way – Eden Project Morecambe, Festival Gardens, and Old Trafford are just a few of the many upcoming projects that are set to make the headlines in the new year.
What they don’t tell you about business rates is the rateable value’s are all going up from April due to revaluation. Which will wipe out any savings made from the lower multiplier
By Anonymous
We were told only Labour would change cities like Liverpool but a year and a half later nothing has changed. Steve Rotheram can’t even tell us when his bendy buses will be in operation. Manchester labour are very good so will have no problems but cities like Liverpool will continue to stagnate.
By Peter
Huge improvement on the disastrous Conservative budget of 2022 which crashed the economy and has had a permanent impact on all our mortgage rates and inflation. Thank god they are no longer in power.
By Anonymous
As building projects such as transport, infrastructure and affordable housing grow the skills shortage will become increasingly problematic. Medium to long term training is the key, however in the short term immigration may have to fill the gap which unfortunately will be exploited by the right wing media and politicians. Immigration of skilled workers into the UK is not a bad thing, this should be recognised and defended by the grown ups against those seeking political advantage.
By Anonymous
A government of growth? This is a government managing Britain’s decline. There is nothing of vision in this budget. There is nothing to excite people about our future, just more mediocrity from a government of bland amateurs.
By Elephant
@Elephant, no this is a government trying to correct the decline and neglect seen by the tory government over 15 years. People tend to have very short-term memories and forget that the economy Reeves took over was completely stagnant and riddled with holes and mismanagement that the tories oversaw to gift their mates a few extra quid, even going so far as to use a pandemic to pull off some shady dealings. Labour are far from perfect, but they’re actually focusing of fiscal stability and long-term planning which is what we’ve needed for years. The markets are on the side of Labour, but of course you know what’s best don’t you, Elephant. Absolutely clueless you are.
By Anonymous
Of course we’ll get the usual ‘oh it was years of the last lot and they’re only trying to put right the damage that..blah blah..’ We get that every time. It won’t help the millions of working people that have been betrayed once again by a chancellor focused on helping ‘The city’ while taxing them into poverty, spending billions on housing ‘new’ people according to their own accounts while ignoring housing costs for those same working class and managing the decline of this country at an alarming rate. It’s not ‘the last lot’ nobody’s fooled anymore it’s the same lot…always has been.
By Anonymous
So anonymous tell me one thing since the 4th July 2024,which has made you optimistic? She was elected to help hardworking families, and she has laid the cost of her hand outs, at their door. Where is the growing economy she promised? The crippling NI contributions, which affected the small business community mainly has destroyed livelihoods, the pathetic lack of infrastructure investment. NPR mentioned again but when is it being built? The elephant in the room ,is the benefit bill. She has just put the burden of that on people she was elected to support. The Tories actually had two years of Covid to deal with, people have very short memories about that. I agree that they made many mistakes but you are really proud of the leadership shown by this cabinet? This government is an accidental government,and it shows.
By Elephant
@Anonymous – i think you have defined clueless by your response to Elephant. A budget for the skivers not the strivers !! Where is the ambition and push for growth?
By Bash the Housebuilder!
This government is clueless, they are destroying businesses, it has nothing to do with the previous government, they have lied through their teeth while increasing the wrong taxes just to save face
By Anonymous
Only Elephant has a grasp of reality. Zero policies to encourage growth, as confirmed in the OBR report
By The Blob
The govt wlll not rebuild anything and we are already in economic decline and have been for many years.
By Anon
The OBR’s housing completion numbers of 305k for 2029/30 seem very optimistic especially when you’d need circa 400-450k approvals for a number of preceding years to have that in place, which is a number not seen for decades(?) at this point.
I see continual delays even when schemes are finally granted approval as ground conditions are often worse than imagined – even on/especially on greenfield sites where little is known beforehand – legal agreements with highway authorities, utilities etc can drag on and that’s putting aside ever increasing costs, introductions of things like Biodiversity Net Gain (which is affecting delivery numbers on some long standing allocated/designated housing sites).
And of course even getting to approval can take years at this point, which the appointing of <1 new junior planner per authority will do little to resolve.
By JohnMac
I’ve been asking consistently for the Leeds Business Rates tax Retention
(Means taxes from businesses in Leeds, Stay in west Yorkshire)
and I was speaking to eveyone about it at the Labour Party Confrence special events in Liverpool and the hotel fringe speaking to literally all the Elites;
And today we have it. So I’m claiming that one fam aha
Leeds love
Is there a Northern city more beloved than Leeds in this Budget? The answer is no. Leeds got a whopping 18 mentions, with the Budget referencing its likely new town (Leeds South Bank), the creation of Leeds City Fund, and a promise to headquarter the new National Housing Bank in the city. Oh, and the Budget reminded readers that the government had provided the £45m that is being used to create the multi-modal gateway at Leeds Rail Station. Manchester received only 10 references, Liverpool 12, and Newcastle 2. Birmingham had five nods, of which one was a footnote.
By Ha ha Mr Wilson
Some people posting here have forgotten the shocking mismanagement of the country and economy during 14 years of the last tory government. The Labour government have inherited a complete mess from the tories which will take years to sort out. It wasn’t a perfect budget but miles better than the chaos inflicted on the nation by the tories.
By Anonymous
Another disastrous budget. Always the same excuses from people ‘The other lot with years of mismanagement… blah blah blah…we hear it every single time. It doesn’t excuse the lack of investment in the Country and the zero ambition to skew the country a little more away from the south east and back towards Labour’s working class roots. The working class will definitely be looking else where come the next election.
By Anonymous
@Anon 8.11 precisely, lots of these comments have short-term memories and do not understand that fixing our economy is going to take years of cut backs and reform to recover from the mess that ensued since 2008. Keep in mind that the UK has never fully recovered from the financial crash and we have had two major shocks in Brexit and Covid coupled with the war in Ukraine that have further damaged our economy. Sure, there are aspects of this budget that seem nonsensical and parts that I’m not happy about. This budget was never going to fix the economy, it’s not possible to do in one budget. This was just about stabilising our spending and getting the markets back onside after years of turmoil.
By Anonymous
Dont worry. Nigel Farage, an Extreme Tory or Anarcho-Capitalist, will soon take charge, dissolve all state institutions, national and local, and scrap the nasty “Welfare State” and then everything will be fine, and we will all be dead rich. Just as Nigel and Boris promised with Brexit.
By Anonymous
Labour will undoubtedly be voted out at the next election and let’s face it whoever comes in could scarcely do a worse job of rebuilding this ‘socialist paradise’. Setting budgets is the minimum we need to get the country back on its feet and it’s no use continually blaming the last lot, there’s always a last lot.
By Anonymous
Employee-Owned Trusts (EOT) cost the Treasury, So Treasury folk scupper that. Nothing changes as long as Oxford-Cambridge bookkeepers at The Treasury rule the UK govt. No point in voting, really, is there? The UK govt is powerless.
By Anonymous