Update: Harrogate-born North Yorks Mayor welcomes Budget as new Chancellor sets out to 'rebuild Britain'
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Still struggling to recover fully from the Covid era after being hit by the cost of living crisis and high energy bills, Harrogate’s food and drink sector has long called for changes to the rates system.
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Hide AdThe first Budget by a female Chancellor of the Exchequer began the Government’s reform of business rates to help level the playing field for high streets across the country.
Rachel Reeves said that, from 2026-27, lower tax rates for retail, hospitality and leisure properties would be introduced permanently.
This will be funded sustainably by introducing a higher multiplier for the most valuable properties, including distribution warehouses used by online giants.
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Hide AdTo support the transition, the Chancellor also announced a 40% relief for retail, hospitality and leisure, up to a cap of £110,000 per business.
The small business multiplier will also be frozen next year to protect against inflation.
This support is worth almost £2.4 billion over the next five years.
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Hide AdOne third of business properties will continue to pay no business rates because of Small Business Rates Relief.
NHS and public sector
The Chancellor also took steps to support education, the NHS and public transport.
On schools, Reeves promised an additional £6.7bn to the Department for Education next year, - a 19% real-terms increase on this year.
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Hide AdThis includes over £1.4billion to rebuild 500 schools "in the greatest need", she said.
Reeves announced a huge £22.6bn increase in the "day-to-day health budget" for the NHS, the largest real-terms growth in day-to-day NHS spending outside of Covid since 2010.
Further boosts for the public realm included a £5bn in house building investment and a pledge that HS2 would be extended to London Euston station
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Hide AdShe also revealed that the Government would be publishing a 10-year plan for the NHS to deliver a shift from hospital to community, from analogue to digital, and from sickness to prevention with the aim of delivering 2% productivity growth in the NHS next year.
Borrowing
The Chancellor told the House of Commons she was committed to fiscal responsibility and was raising taxes by £40bn in total via the Budget.
Although the independent Office for Budget Responsibility said borrowing was now forecast to fall by 2.5 per cent of GDP between 2024-25 and 2029-30, other pointed out that Chancellor Reeves had relaxed the rules on borrowing more to allow for up to £50bn more borrowing to invest in big building projects.
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Hide AdReacting to the Budget today, Tory leader Rishi Sunak said: “Time and again we Conservatives warned Labour would tax, borrow and spend far beyond what they were telling the country and time and again they denied they had such plans.
“But today the truth has come out, proof that they planned to do this all along."
Reaction
Harrogate and Knaresborough’s Lib Dem MP Tom Gordon criticised the Government’s decision to raise the bus fare cap from £2 to £2 per journey as “Labour’s Bus Tax.”
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Hide AdAlthough the first Budget in 14 years by a Labour Government may not have felt as bleak as some in the media had predicted with a freeze on fuel duty, the tax on draught drinks cut by 1.7% and the decision to reverse Tory plans to end a freeze on income tax and National Insurance thresholds in 2028, some economists warned of negative effects on businesses.
Free market think tank the Institute of Economic Affairs claimed that Labour was imposing "heavier burdens on business and more borrowing for public sector capital spending" which would impede economic growth.
It added that, by substantially upping the minimum wage rates for low paid workers, the Government had "added to the other costs imposed on employers".
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Hide AdRetail and social sustainability expert and CEO of LCD Ventures, Florian Wupperfeld, said, though the Chancellor’s commitment to reforming business rates was a promising first step, it was "not a silver bullet for saving Britain’s struggling retailers and high streets."
But David Skaith, Labour Mayor of York and North Yorkshire, welcomed the Budget on the whole, while acknowledging the “difficult decisions” that Rachel Reeves had been forced to make.
"Today’s Budget is historic,” said Mr Skaith.
"It’s the first to be delivered by a woman, a huge milestone for our country and for Rachel Reeves.
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Hide Ad"The scale of negligence by the previous Conservative government has created a mess on a scale never seen before.
"I understand that difficult choices have had to be made to get things working again and turn the page on the last 14 years.
"I welcome the commitment to bus services, this funding will enable us to begin building an integrated transport network that puts passengers first.
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Hide Ad"The continuation of the bus fare cap, albeit at £3, protects against hikes in rural bus fares and the loss of services.
"I am pleased to see confirmation of the delivery of the TransPennine Route Upgrade, improving the connection between York and Manchester.
"This link is vital to ensure people can move across the North for work and leisure.
"Potholes are a huge concern in York and North Yorkshire.
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Hide Ad"There is a vast road network to maintain, I am therefore pleased that the Government have gone beyond their manifesto commitment on funding for potholes.
"This is a Budget that will start to deliver change across Britain and here in York and North Yorkshire.
"I look forward to continuing to work closely with the Government to secure the growth, investment, and change that people across York and North Yorkshire need."
Personal taxes
In terms of personal taxes, the Budget included:
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Hide AdNo change in the rates of income tax and National Insurance (NI) paid by employees, and of VAT.
Income tax band thresholds to be unfrozen in 2028, preventing more people being dragged into higher bands as wages rise over time.
Capital gains tax paid on profits from selling shares to increase from up to 20% to up to 24%.
Rates on additional property sales to stay same.
The freeze on inheritance tax thresholds to be extended to 2030.