On 30th October, Chancellor of the Exchequer Rachel Reeves is set to announce the 2024/25 Autumn Budget. The Labour government’s first official budget since their historic election win in July 2024. The publishing of the year’s most important economic forecast is awaited with much anticipation.
Predictions as to what the budget will include have been flooding in this week, with many of the country’s wealthier taxpayers likely to face an ever increasing tax burden. Keir Starmer himself warns that the budget will be “painful”, with many having to “accept short-term pain for long-term good”.
Whilst Labour has ruled out increasing incomes tax, national insurance rates, and VAT for “working people”, rumours suggest that national insurance will rise for employers, which will increase tax for every member of staff. Inheritance tax is also facing changes, with potential adjustments to the tax-free, nil-rate band forecast. In an unpopular move last month, the government also repealed winter fuel payments for millions of pensioners, leaving only those on pension credit eligible to claim. The Labour manifesto did, however, commit to maintaining the state pension triple lock, a pledge that Reeves is likely to repeat come budget day.
One of the current government’s most controversial policies is also set to go ahead as private schools will be faced with charging 20% VAT on their fees, a tax previously nullified by their “charitable status” – a questionable status indeed. Whilst for some this policy has caused outrage, the Institute for Fiscal Studies (IFS) calculated last year that the removal of tax exemptions will likely generate an extra £1.3bn to £1.5bn in wealth for the government. What this will be used for is yet currently unknown.
What all this means for students in higher education is largely unclear. Whilst subsidies and cuts to tuition fees would be welcomed with open arms, this is highly unlikely. The University and College Union recently called for Starmer to tax big businesses to produce an education levy that would provide universities with much needed extra funding and end its tuition fee-based system, but recent news shows that in fact tuition fees are likely to rise with inflation, with fees potentially rising by up to 13.5% over the next five years. This increase is a particularly bitter pill to swallow when considering that Sir Keir Starmer pledged to scrap tuition fees altogether when he assumed the leadership of the Labour Party in 2020.
Similarly rent caps would be appreciated, with the last rent cap ending on 31st March, alongside serious increases to maintenance loans to reflect inflation. The Education Secretary, Bridget Philipson, has proposed a potential reintroduction of maintenance grants for the poorest students, to offset a tuition fee hike, but it is currently unclear how many students will benefit and how wide-reaching the policy will be. Once again, it feels like the Autumn Budget allows students to fall by the wayside, neglected and furnished with inadequate support.
“Keir Starmer, 2020 Labour Party leadership election hustings, Bristol 1” by Rwendland is licensed under CC BY-SA 4.0.