27 November 2025
Chancellor of the Exchequer, Rachel Reeves, announced an increase to the National Minimum Wage, “permanently lower business rates,” and an investment in 250 new Neighbourhood Health Centres during the Budget yesterday (Wednesday 26 November).
Reeves announced her Budget in the context of the Office of Budget Responsibility (OBR) accidentally releasing its report, which predicted that £26 billion in taxes will be raised as a result of the Budget by 2029–2030, early.
Speaking about the NHS in her opening remarks, Reeves noted that hospital waiting lists are down 230,000 since the Government came to power in July 2024.
The Government expects to have made £4.9 billion in efficiencies by 2031, Reeves said – and used the scrapping of NHS England as an example of work that has already been done in this area.
Any efficiencies saved within the NHS will be invested back into the system, Reeves emphasised.
Here, OT picks three key points from Reeves’ second Budget since becoming Chancellor.
1 National Minimum Wage to increase between 4.1% and 8%, depending on age
Expected increases to the National Minimum Wage and National Living Wage were confirmed by the Chancellor earlier this week, with percentage increases confirmed by Reeves during her Budget speech.
The National Minimum Wage for 18–20-year-olds will increase from £10 to £10.85 per hour, whilst the hourly rate for employers over the age of 21 will increase from £12.21 to £12.71.
Those aged 16 and 17 will see a new minimum wage of £8 per hour, an increase of 6%.
The National Living Wage, for those aged 21 and older, will also increase, to £12.71.
Changes will come into effect in April 2026.
Helen Dickinson, chief executive of the British Retail Consortium, said that “while increases in the National Living Wage were in line with expectations, the rise to the minimum wage for under-21s could limit employment opportunities.”
She added that the National Living Wage uplift was “in line with the core expectations announced by the Low Pay Commission, providing stability for retailers’ financial planning.”
2 Positive moves on business rates – but criticism that they do not go far enough
In making regulatory changes that she said were advised by the British Retail Consortium, Reeves promised “permanently lower business rates for retail, hospitality and leisure.”
The move is expected to affect 750,000 retail, hospitality and leisure (RHL) businesses.
The document continued: “The RHL multipliers will be 5p below their national equivalents, making the small business RHL multiplier 38.2p and the standard RHL multiplier 43p in 2026-27.
“Small and standard RHL properties will pay the lowest tax rate since 1990-91 and 2010-11 respectively.”
Lower rates will be funded by higher rates for properties including warehouses used by large online retailers, Reeves said.
The UK’s customs duty relief for low-value imports will be removed to “stop online firms undercutting our High Streets,” she added.
Whilst welcoming the news on business rates, Dickinson warned that the move might stifle the creation of jobs in bigger organisations.
“The announced permanent reduction in retail business rates is an important step to reduce the industry’s burden from this broken tax,” Dickinson said.
“Yet the decision to include larger retail premises in the new surtax does little to support retail investment and job creation.”
She added: “This Budget offered much-needed relief for some retailers, but fell short of the bold action needed to secure the long-term future of our Sigh streets and mitigate the inflationary pressures which are currently pushing up prices for households.
“While the announced changes to business rates are a step in the right direction, many felt the Chancellor should have gone further. The 5p rates reduction for retail, hospitality and leisure properties with a rateable value below £500,000 is unlikely to fully fix the situation where retail, as 5% of the economy, pays over 20% of all business rates.”
Andrew Goodacre, CEO of the British Independent Retailers Association, was also critical of the move, calling it “tinkering around the edges.”
Goodacre said: “The original proposals talked about reducing multipliers by up to 20p for smaller properties and 10p for larger ones.
“What we’ve actually got is a 5p reduction – and even that is largely down to the rates revaluation rather than genuine reform.”
Goodacre added: “The government has missed a real opportunity to tackle an unfair tax that is crippling High Street businesses.”
A consultation on business rates and investment will run until February 2026.
3 Investment in Neighbourhood Health Centres confirmed
A long-discussed solution to the Government’s shift towards care in the community rather than in hospital, the Budget revealed further details of an investment in 250 new Neighbourhood Health Centres.
GPs, nurses, dentists, and pharmacists are expected to work within the centres.
In her speech, Reeves said that more than 100 of the 250 Neighbourhood Health Centres so far committed to would be open by 2030.
Birmingham, Truro and Southport would be amongst the first areas to see a centre open, Reeves said.
She also committed £300 million in technology to “improve patient services.”
The Budget document itself noted that this £300 million will consist of “additional capital investment in NHS technology to boost productivity, support staff, and improve patient outcomes, driving the shift from analogue to digital.”
Responding to the announcement of Neighbour Hood Centres, the AOP emphasised that investment in the NHS “must extend to the whole of primary care” if it is to successfully deliver on the Government’s commitment to a hospital to community shift.
Adam Sampson, chief executive of the AOP, said: “It is encouraging to see renewed investment in the NHS, and absolutely right that neighbourhood health services are being prioritised.
“But to get the full value from this commitment, and to truly bring patient care closer to home, support must reach all primary care providers.”
Optimising the role of optometrists up and down the country would give the Government an immediate win, and this would be felt by patients, Sampson noted.
Sampson added: “Everyone should have access to the healthcare they need, in a setting that is fast and convenient for them.
“What we currently have is a postcode lottery of services. If we are going to make neighbourhood care really work for patients, investment must recognise the existing workforce and estate that we already have across the whole primary care ecosystem and ensure we are empowering those professionals – our members – to deliver.”
What else did Rachel Reeves announce in the Budget?
During her speech, Reeves also revealed that small and medium sized businesses would benefit from a removal of the co-investment payments that they currently pay for apprentices under the age of 25 – meaning that training for apprentices in this age group will effectively become free for businesses of this size.
She also noted that the basic and higher rate tax on income from property, savings and dividends would increase by two percentage points.
Tax thresholds would also be frozen for three years, Reeves said.
She also announced the removal of the two-child benefit cap – which had long been a thorn in the Government’s side, and had seen seven Labour MPs lose the whip over support for its withdrawal after the party had been in government for less than three weeks in July 2024.
What was missing from the Budget?
Whilst welcoming the commitment to Neighbourhood Health Centres, the Royal National Institute of Blind People (RNIB) noted that eye care has not been mentioned as part of the plans.
Vivienne Francis, RNIB’s chief strategy and public affairs officer, said: “We welcome the investment in 250 Neighbourhood Health Centres, but so far eye care is not being mentioned as part of these plans, despite the potential to provide more eye care closer to home.”
She also highlighted that, whilst the RNIB is glad the Government is rethinking its welfare reforms, the charity is disappointed that there was no mention of adult social care in the Budget.
“We’re hugely concerned about the deafening silence around adult social care services in today’s budget,” Francis said.
She noted: “Already local councils don’t get the resources and guidance needed to provide essential vision rehabilitation services to people coming to terms with sight loss.
“If this continues, thousands of people will be stuck waiting many months for vital support such as using a white cane and skills for living independently.”
Francis added: “We know that without this, people can become isolated at home and lose confidence – having their lives put on pause. We can’t let this continue.”
OT asks...
Will the Budget affect your business?
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