Rachel Reeves and Keir Starmer after the Budget speech

Budget 2024: Eight changes that will affect Scots from pints to petrol

by · Daily Record

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Rachel Reeves announced a whole host of measures in her Budget on Wednesday afternoon. The Labour Chancellor was the first ever woman in history to make the statement.

She spoke for 77 minutes, longer than any Chancellor in the last 14 years. Reeves announced an extra £40 billion increase in taxes and big hikes in public spending.

Here are the ways in which her Budget will affect Scots.

Scottish Government funding

Reeves handed the Scottish Government a £3.4bn boost next year, and £1.5bn for the current financial year. The Chancellor announced the "largest real-terms funding settlement" for devolved governments in 25 years.

In total, the Scottish Government will be provided with a £47.7 billion settlement in 2025/26. This includes a £3.4 billion top-up through the Barnett formula, with £2.8 billion for day-to-day spending and £610 million for capital investment.

Cigarettes and vapes

A flat rate of duty will be applied on all vaping liquid from October 2026 alongside an additional one-off increase in tobacco duty to encourage people to give up smoking.

She will increase duty on hand-rolling tobacco by a further 10 per cent this year and introduce a flat-rate duty on all vaping liquid from October 2026.

Alcohol

The price of wine and spirits is set to rise after alcohol duty was hiked in today's Budget. But draught pints will receive a tax cut.

Rachel Reeves announced on Wednesday that the levy on non-draught drinks will rise in line with inflation from February next year. But at the same time, draught duty will be cut by 1.7 per cent. The Chancellor said this means “a penny off a pint in the pub”.

Fuel duty

Reeves threw a lifeline to motorists by extending the freeze on fuel duty in the Budget. She said prices will be controlled to help drivers in the cost of living crisis. She said increasing the tax would be the "wrong choice" and added: "No higher taxes at the petrol pump next year."

Pensions and benefits

Reeves renewed the Government’s commitment to the pension triple lock in her speech. She said that the new state pension will go up by 4.1 per cent in 2025-26 - meaning over 12 million pensioners will gain up to £470 next year. Working-age benefits will also go up by 1.7 per cent.

Income Tax

The Government will not extend the freeze on income tax and national insurance thresholds beyond 2027/28, saying it would “hurt working people” to keep thresholds frozen.

Although income tax is devolved, the personal allowance is set by the UK Government. This means that the amount of tax-free income Scots have will go up.

Minimum Wage

The national minimum wage will rise by 6.7 per cent to £12.21 an hour. This happened because the Government asked the Low Pay Commission - which figures out the rate - to take the “cost of living” into account.

The Government will move to a single level of the minimum wage which will mean a flat rate for those 18 and above.

What the Budget means for you

Tax Rises

Employees' national insurance, VAT or income tax will not increase. But there will be a 1.2 percentage point increase for employers’ national insurance contributions to 15 per cent in April 2025. The threshold for paying them will fall from £9,100 per year to £5,000.

The headline rates of capital gains tax will also increase, with the lower rate rising from 10 per cent to 18 per cent. The higher rate will go from 20 per cent to 24 per cent.

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