The 2024 Autumn Budget, delivered by Chancellor Rachel Reeves, introduces several financial policies and investments that could have a lasting impact on the North of England. With a focus on restoring fiscal stability, boosting public services, and reforming tax structures, the budget addresses pressing regional needs, such as healthcare funding, education investment, and infrastructure development, while raising questions about potential effects on local businesses and rural communities.
Healthcare and Education Investment
The North of England, often facing healthcare disparities and longer NHS waiting times, could see improvements from the £22.6 billion increase allocated to healthcare across the UK. The budget aims to reduce wait times and improve service quality, which could be particularly impactful for under-resourced areas in the North where hospital and GP waiting times have been a growing concern. With healthcare being a high priority for the Northern economy, these funds could help address some long-standing regional challenges
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In education, the North’s schools are set to benefit from a share of the £6.7 billion capital investment directed towards improving facilities, supporting breakfast clubs, and addressing teacher shortages in crucial subjects. Given the push in the North to improve educational attainment levels and close the performance gap with the South, the additional investment may help recruit and retain teachers, enhance school infrastructure, and provide more support for disadvantaged students
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Tax Changes and Their Impact on Northern Businesses
One of the budget’s primary revenue-generating measures includes an increase in National Insurance contributions and Capital Gains Tax adjustments. The rise in National Insurance contributions to 15% from April 2025 will affect businesses across the North, potentially impacting profitability for smaller enterprises that are central to local economies. For many Northern business owners, especially in sectors like hospitality, retail, and manufacturing, these tax changes could represent an additional cost amid ongoing economic pressures
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Furthermore, changes to Capital Gains Tax, with an increase in the lower rate from 10% to 18% and the higher rate from 20% to 24%, may influence property and investment markets in the North. This adjustment is intended to target higher-income earners, which could affect investment portfolios and property owners, potentially dampening some of the investment activity critical for urban renewal efforts in Northern cities
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Infrastructure and Environmental Initiatives
The budget’s emphasis on green initiatives includes a proposed increase in fuel duty, which may impact Northern communities more heavily reliant on cars, particularly in rural areas where public transport options are limited. This increase aligns with the government’s goal of promoting a green economy but raises concerns for regions like the North where car dependence remains high. Reeves’ focus on environmental sustainability includes opportunities for the North’s renewable energy sector, especially as it continues to expand its capacity in wind and solar power projects
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Council Tax Flexibility and Local Authority Impact
Council tax flexibility, which allows local authorities to increase council tax by up to 5%, will have direct effects on Northern local authorities. Some councils, already stretched by high demand for social services and infrastructure improvements, may choose to raise taxes, impacting household budgets. This increased financial autonomy could help Northern councils address regional needs, but it also places additional financial pressure on residents in a region where disposable income is often lower than in the South
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Conclusion
The 2024 Autumn Budget provides avenues for the North of England to address some long-standing public service and economic challenges. With increased funding for healthcare and education and the potential to enhance renewable energy infrastructure, the budget offers promising developments for Northern communities. However, tax adjustments and fuel duty hikes may present financial challenges, particularly for smaller businesses and rural residents. How effectively the region leverages this funding will be crucial in determining the North’s economic resilience and growth in the coming years.