The Chancellor will announce the long-awaited Budget on Wednesday.
09:51, 25 Nov 2025
Rachel Reeves(Image: Getty Images)
Rachel Reeves is set to announce the UK Government’s spending plans for the year ahead. Here’s how it could impact Scots
- The Chancellor is expected to freeze income tax thresholds – known as fiscal drag – in a bid to close a multi-billion pound black hole. Thresholds are devolved to Holyrood, but the £12,570 tax-free personal allowance is reserved and a freeze would affect Scots.
- Speculation is mounting that the Labour Government could scrap the two child benefit cap across the UK. The cap, introduced by the last Tory Government, limits Universal Credit payments to the first two children in a family and the Chancellor Rachel Reeves is widely expected to axe the curb.
- Reeves is also believed to be considering a Budget move to lower energy bills ahead of a biting winter. Labour promised before the general election to lower bills by £300 and options include getting rid of VAT on energy bills.
- The Chancellor is also expected to announce a higher-than-inflation rise for 13 million pensioners in her upcoming budget. People on the full rate of the new state pension – including those in Scotland will benefit with more than £550 a year more.
- Any rise in departmental spending announced by Reeves will mean extra money for the Scottish Government through Barnett consequentials. SNP ministers have already benefited from the largest devolution settlement in history last year, not that anyone in Holyrood has thanked Reeves for it, with Nationalist ministers repeatedly accusing Labour of overseeing a return to “austerity”.
- READ THE FULL STORY: Rachel Reeves hands Scottish Government £3.4bn boost for public services
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