On Tuesday the Chancellor put the country on notice that tax rises are coming—and those looking to safeguard their savings and investments should seek advice urgently, says the CEO of global financial giant deVere Group.
In an unprecedented move, Chancellor Rachel Reeves has delivered a pre-Budget speech 22 days ahead of the Autumn Budget, outlining the “principles and choices” that will guide her Budget decisions.
Appealing to public sentiment and referencing the strain on the NHS, Reeves attributed much of the current fiscal challenge to “years of mismanagement” and a £22 billion black hole left by the previous government – citing the fallout from Liz Truss and then Chancellor Kwasi Kwarteng’s disastrous mini-Budget and Britain’s high borrowing costs among the key contributors.
In a nod to fiscal realism, the Chancellor said it was time to be honest with the public about the consequences of past decisions and to “act on the world as it is, not as we wish it to be.” Her message centred on stability, investment and reform, marking a departure from previous governments that, she said, failed to confront deep-rooted challenges – most notably the UK’s “long-standing productivity problem, not puzzle” and the impact of post-financial crisis austerity.
With markets already reacting to this rare pre-Budget announcement, speculation is mounting that Reeves may become the first Chancellor in 50 years to raise income tax – a move that would break Labour’s election manifesto pledge.
Maike Currie, VP of Personal Finance at PensionBee, comments: “Rachel Reeves is ripping off the band-aid – albeit slowly and deliberately. By signalling her intent ahead of time, she’s preparing the ground for tough but necessary fiscal choices. This approach sets the stage for what could be one of the most consequential Budgets in recent memory.”
Rain Newton-Smith, Chief Executive, CBI, said, “The Chancellor is right to ensure that, whatever difficult choices must be made in the forthcoming Budget, supporting growth is the lens through which decisions are made.
“The world has changed in the last 12 months and when geopolitics and global markets shift; the policy response must shift too.
“Leadership requires setting out a vision. But just as critical is delivering on the pathway to get there.
“A Budget that backs business to create jobs and innovate, that champions our world-class universities and strengthens the UK’s position as a global leader in life sciences and financial services, will help secure the path to sustainable economic growth and higher living standards.
“Economic stability and building strong foundations are crucial to the success of the whole country. But with the business tax burden at a 25-year high, there are no easy choices. The Budget in three weeks’ time must resist short-term fixes that risk stalling the engine of growth.”
Jonny Haseldine, Head of Business Environment Policy at the British Chambers of Commerce, said, “Business shares the Government’s ambition to grow the economy, reduce inflation and boost productivity. However, none of that is possible if costs continue to pile up on firms.
“That’s why our message is clear – no more tax on business. The Chancellor spoke this morning about choices, hitting firms in the pocket once again would be the wrong choice.
“Our latest research shows business confidence and investment levels continue to suffer. A fifth of firms are expecting lower turnover for the next year, and a quarter have scaled back investment plans.
“Improving the business landscape requires a Budget that boosts trade, tackles the skills problem and turbocharges infrastructure.
“Firms across the UK are already feeling bruised and many are struggling to keep their heads above water. November 26th is a make-or-break moment for British business – the Budget must deliver.”
