Taxes will rise by £40 billion to plug the “black hole” in the UK’s finances while there were funding pledges for technology R&D in the Autumn Budget.

Around £25bn of this £40bn will be from a rise in employers’ National Insurance contributions as the government pledged to fix the nation’s struggling NHS, public services and transport infrastructure.

Chancellor Rachel Reeves, revealing Labour’s first Budget since coming to power this summer, said the country needed “responsible leadership” after 14 years of Conservative rule.

“We must restore economic stability… the party opposite failed our country. Their austerity broke our National Health Service. The British people have inherited their failure,” she told the House of Commons.

“They called an election to avoid making difficult choices.”

Reeves said the freeze on income tax thresholds will end in 2028-29 but improved tax relief for creative industries – particularly VFX in TV and film – and allocated £25m to the North East Combined Authority to redevelop the Crown Works Studios site in Sunderland, projected to create 8,000 jobs.

The Chancellor also pledged £500m to improve mobile broadband coverage and said regional mayors would gain greater independence from Westminster, with Greater Manchester and the West Midlands the first authorities to receive integrated settlements from next year.

Other measures will see the lower rate of capital gains tax increase from 10% to 18%, with the higher rate increasing from 20% to 24%; 40% relief on business rates in 2025-26, up to a £110,000 cap; a 6.7% rise in the national living wage for people aged 21 and above to £12.21 an hour; and a 16.3% rise in the national minimum wage for 16-20-year-olds to £10 an hour.