The Budget – Long Read

Ahhhhhhhh, run away screaming, a massive fright has happened. Or the budget happened. Some would have thought it was Halloween on Wednesday and all the monsters and ghoulies came out. But not really, our new Chancellor, Rachel Reeves, stood up and delivered the much awaited and fated budget. It’s the thing I’ve been wanging on about for a while. Everything should start happening from now because we all know what the money situation is. And that’s what I expect. I expect the government to get on with it and at pace. A small caveat. Budgets have a tendency to unravel after the fact depending upon markets, uproar etc. So some of this shit might not go ahead. But let’s look at some highlights and lowlights.

• National minimum wage is rising to £12.21 per hour from April 2025, up from £11.44 per hour. This rise is a continuation of a trend that started with the Tories. This is a good thing as those on the lowest wages will get more and it’s a 6.7% increase. However I do always worry that these increases are passed onto the customers of those businesses.
• Carer’s allowance is going up from £81.90 per week to a reported £195.36 per week from April 2025. Also a carer can earn over £10,000 per year whilst receiving the allowance. This seems great to me. Carers do loads of unpaid ‘work’ helping out those that need our help.
• The commitment to the triple lock for pensioners and their pensions was confirmed. This will mean an increase of £470 per year for over 12 million pensioners. The winter fuel allowance is worth £200 or £300. It seems to me that the furore over that allowance being cut could have been lessened with this announcement coupled with it.
• Fuel duty was frozen yet again. The extra 5p would have gathered in an extra £3 billion per year for the exchequer, but this now won’t happen. I have an electric car so this is a big shrug for me. However there is a call for fuel duty to start rising so that the money raked in could be used to fund clean energy or putting into car charging points to persuade petrol car drivers to move to electric.
• National insurance for employers is increasing from 13.8% to 15% and businesses will start paying NI early because the threshold is being lowered. This could be a big hit on all businesses, however it could also gain the exchequer £25 billion.
• Employment allowance for small businesses will go up from £5,000 to £10,500. For small businesses this is quite a windfall and will help offset some of the cost of the NI increase in the point above.
• Capital gains tax is increasing. The lower rate will rise from 10% to 18% and the higher rate will go from 20% to 24%. This will only affect those who own shit more than the one house. Sounds good to me.
• The inheritance tax threshold has been frozen and will extend to 2030. Don’t be fooled, inheritance tax only affects currently 4% of the population, but for some reason is a really emotive issue for those who will never get caught by it. This seems to be like a little bit of a white flag to keep some newspapers off their backs.
• There’s an increase on tax for smokers. This is great, tax the fucking death sticks into non-existence. And there’s an increase on tax for non-draught alcohol. 1p is being taken off draught alcohol. I don’t give a shit. Don’t smoke, don’t drink, who cares.
• The non-dom tax regime is being abolished and a new system will take it’s place. Hopefully a fairer system. These rich fuckers should be paying their way.
• The windfall tax on oil and gas profits is being increased to 38%. That’s great, they’re making way too much money from people suffering with high energy bills.
• Vat is being introduced on private school fees from January 2025 and they are removing business rates relief for private schools from April 2025. Don’t let the papers fool you with stories about private schools closing. More have opened in the last year than closed. They are a lucrative business.
• There will be no extension on the freeze in income tax and NI thresholds from 2028/2029 where they will then increase with inflation. The freeze on these thresholds is known as fiscal drag, where more and more people get caught in these tax traps as their wages go up. I would have hoped this was to be dropped straight away, however the fact that it isn’t being extended is a good thing.
• The bus fare cap was to end in December 2024. The government has extended the cap to December 2025, which is great. But the cost has gone up from £2 to £3 and this will impact people a lot. Lower bus fares means more people use buses.

Then was a load of stuff on boosting funding in all sorts of government departments as well. For me, there’s some good stuff above and some not so good stuff. Reeves is taxing more, she’s spending more and she’s borrowing more. But fuck me we have got to get our economy moving. We can’t do this by sitting on our hands. And we need to sort out fourteen years of the Conservatives stripping away public services. That costs money. Look, if you’re on the right, you’ll be howling about this, but you would’ve anyway. And if you’re on the left, you’ll be howling about this, but you would’ve anyway. The proof will out if or when we see increased growth, improved services and improved fortunes for those less fortunate. Fun times.