The new Labour government’s first Budget reduces business rates and allocates £1.9 billion to support small businesses and the high street
Chancellor of the Exchequer, Rachel Reeves, presented the Labour government ’s Autumn Budget 2024 in the House of Commons on Wednesday, describing it as “a Budget to fix the foundations of the economy and deliver change by protecting working people, fixing the NHS and rebuilding Britain.”
The Budget, the first from a Labour government in 14 years, introduces some significant measures to boost small businesses and deliver crucial support to the NHS amid challenging economic conditions.
In a move to support businesses, the government has announced a fairer business rates system by permanently lowering the business rates multipliers for retail, hospitality, and leisure (RHL) properties from 2026-27.
Additionally, £1.9 billion has been allocated to support small businesses and the high street in 2025-26, including freezing the small business multiplier and providing a 40% relief on RHL property bills, up to a £110,000 cash cap.
To repair the public finances and raise funding for public services, the government has decided to increase the employer National Insurance Contributions (NICs) rate by 1.2 percentage points to 15%, with effect from 6 April 2025.
The per-employee threshold at which employers start paying NICs will be reduced from £9,100 per year to £5,000 per year.
To support small businesses with these changes, the government has increased the Employment Allowance from £5,000 to £10,500 and removed the £100,000 threshold, expanding this to all eligible employers. This means 865,000 employers will pay no NICs next year.
To fix the NHS, the government is providing an additional £22.6 billion of resource spending in 2025-26, compared to 2023-24 outturn, for the Department of Health and Social Care.
This extra investment aims to support the NHS in England to deliver an additional 40,000 elective appointments a week to reduce waiting times for patients seeking treatment.
In 2025-26, the government is increasing capital investment in public services, allocating £1.5 billion to expand capacity to deliver over 30,000 NHS procedures, more than 1.25 million additional diagnostic tests, and new beds across NHS facilities. Additionally, £1 billion will be invested to address the backlog of critical NHS maintenance, repairs and upgrades.
