Chancellor Delivers Budget 2025

26/11/2025

Rachel Reeves has presented the details of her second Budget since becoming Chancellor, setting out measures to reduce barriers to investment, strengthen support for UK businesses and reinforce the country's economic foundations. Several of the initiatives announced will have a direct impact on businesses and public services, summarised below.

Business and Employment

A new 40% allowance will enable businesses to write off a larger share of upfront investment costs.
A consultation will be launched on encouraging more entrepreneurs to base themselves in the UK.
UK stock market listings will benefit from relief measures, including a three-year exemption from stamp duty to encourage domestic listings.
Business rates will be permanently reduced for 750,000 retail, hospitality and leisure firms, funded by higher rates on properties over £500,000 used by large warehouse operators. A further £4.3 billion will support properties facing significant increases in their bills.
Apprenticeships will be fully funded for small and medium-sized enterprises.
The minimum wage for 18- to 20-year-olds will rise from £10 to £10.85, and the national living wage will increase from £12.21 to £12.71.
Over £1.5 billion will be invested through the Youth Guarantee and the Growth and Skills Levy to reduce NEET rates and ensure 16-24-year-olds have access to training or employment support.
Reforms to the visa system will aim to secure global talent for UK businesses.

Devolution and Regions

Additional funding includes £370 million for Northern Ireland, £505 million for Wales and £820 million for Scotland.
Seven mayors will receive £13 billion in flexible funding for skills, business support and infrastructure.
English regional mayors will gain powers to introduce a tourism tax on hotel and holiday-let stays, in line with measures in Scotland and Wales.
Wales will host two AI Growth Zones, expected to create over 8,000 jobs, supported by a £10 million investment in the semiconductor sector.
Scotland will receive £14 million for low-carbon technologies in Grangemouth, £20 million for infrastructure renewal in Inverclyde and £20 million for redevelopment in Kirkcaldy.

Public Sector

The Chancellor reiterated a commitment to cutting waste, including plans to abolish Police and Crime Commissioners and 5,000 councillors, saving more than £250 million over five years.
Since the last Budget, over £120 billion has been directed to additional capital investment for roads, rail and energy, including £15.6 billion for major city-region transport. The OBR estimates this uplift will raise potential output by around 0.4% over a decade.
As confirmed in the Spending Review, an extra £5 million will go to secondary school libraries and £18 million to improve playgrounds.

Energy and Transport

Red tape limiting investment in nuclear power will be reduced, following recommendations in a recent review.
Fuel duty will be frozen for five months from April, with phased increases beginning in September 2026.
A mileage-based tax for electric and plug-in hybrid vehicles will be introduced from 2028.

The OBR forecasts UK economic growth of 1.5% this year, up from a previous estimate of 1%, with inflation expected to average 3.5% before falling to 2.5% next year and returning to the 2% target in 2027.