Budget 2024 Planning Focuses on Cost of Living, NHS, and Debt Reduction
Reeves began budget planning in July, instructing aides to avoid spreadsheets and focus on three priorities: cutting the cost of living, reducing NHS waiting lists, and lowering the national debt.
Budget messaging aims to target both the public and markets by curbing inflation, maintaining spending on public services, safeguarding long-term infrastructure, and tackling debt.
Around 13 tax proposals have been considered ahead of final decisions. Budget 2024 initially had a fiscal headroom of £9bn; however, the Office for Budget Responsibility (OBR) later indicated that the economy is weaker than previously thought, reducing the available fiscal headroom.
Constraints include Labour’s pledges not to raise income tax, National Insurance, or VAT, combined with backbench pressure concerning energy costs and the two-child cap.
Tensions exist such as hikes in National Insurance intended to fund hiring being seen as counterproductive to growth, alongside ongoing moves toward stronger worker protections and regulatory expansion.
Policy rumors include a possible pay-per-mile charge for electric vehicles, and ongoing negotiations over whether to soften oil and gas taxation to retain investment in the North Sea.
