The Chancellor’s autumn statement is aimed at plugging a giant fiscal blackhole by raising £40bn in taxes, but there is also billions of pounds of investment in school, the NHS, transport and the environment.
She announced a raft of proposals in the House of Commons, including changes to employers’ national insurance contributions, inheritance tax and capital gains tax.
Ms Reeves also set out plans for environmental growth by investing in green energy – in particular £2bn in 11 HAR1 hydrogen schemes in the UK - and changes to the windfall tax on North Sea oil and gas firms.
Hydrogen
Research into hydrogen technology is central at Loughborough and the pledges were welcomed by Professor Dan Parsons, Loughborough’s Pro Vice Chancellor for Research and Innovation.
He said: “This is excellent news for the UK’s leadership in the net zero transition.
“Hydrogen will play a key role in our global decarbonization journey—from hydrogen jet engines to methods of storing green power, hydrogen holds huge potential.
“It’s encouraging to see the UK government provide confidence to the sector by committing to invest in technologies based on hydrogen solutions.”
Other areas of the 2024 Budget were also addressed by a number of academics and experts at Loughborough.
UK Economy
In terms of benefits for the economy, business experts expressed concerns about the Chancellor’s lack of commitment to help SMEs, claiming her plans for increasing National Insurance contributors for employers – making it more expensive to hire staff – would damage growth.
Professor Eric Pentecost, of Loughborough Business School, said: “Budget predictions suggest slower growth in the future compared to recent years—hardly a budget for growth.
“Small businesses are bearing the brunt, facing higher wages, increased national insurance, and a less flexible labor market, despite being the most innovative and efficient sector.
“Meanwhile, an expanded public sector, without major reorganization, risks dragging down growth and significantly adding to debt repayment costs.”
Professor Ali Choudhary, also of Loughborough Business, added: “The budget will reinforce the lack of business confidence. We can expect continued low growth and delays in the rationalization of interest rates.”
Increase in public spending and investment
The budget outlined a significant rise in public spending, with a commitment to inject an additional £100bn into capital investments over the next five years.
“This increase targets both economic stimulation and improved public services – additional spending on NHS, or infrastructure investment,” said Dr Dawid Trzeciakiewicz, a lecturer in Economics.
“The UK has historically low investment-to-GDP levels compared to other G7 nations, and this boost is expected to enhance productivity, which should eventually lead to higher wages.
“Recently, even the IMF called for increased public investment in the UK. The increase in spending is likely to positively affect household welfare by improving access to public services and creating more job opportunities.”
National Living Wage
In a bid to deliver a “genuine living wage for working people” – as set out in the Labour manifesto – Ms Reeves announced a 6.7% increase to the minimum wage, raising it to £12.21 an hour for those aged 21 and over.
Professor Matt Padley, co-director of the Centre for Research in Social Policy (CRSP), said: “I think so much of it had been leaked that there were very few surprises.
“It’s good to see there has been no extension of the freeze on NI and income tax thresholds beyond 2027-28, with a commitment to uprate these by inflation from 2028-29 onward.
“It was already announced, but the increase in the National Living Wage for over 21s from £11.44 to £12.21 starting April next year is welcome.
“However, while the rate for 18-20-year-olds has also seen a significant increase, it would have been good to see the same rate applied to all workers over 18.”
ENDS