The budget will leave many people reeling, a leading consumer expert has warned.
Jane Hawkes said the record-breaking tax-rises will be hard for many to absorb.
Consumer expert Jane said: “Tax rises of around £40bn is the biggest in 30 years and will leave many reeling from the list of announcements.
“The big and very welcome surprise has come with no increase on fuel duty so at least we won’t be paying more at the pumps. This has a multi fold effect as any increase would have had a much wider detrimental impact. However the devil is in the details as although no increase in fuel duty, 2025/26 VED rates will be uprated for cars, vans and motorcycles in line with RPI from April 2025.
“Consumers also won’t be paying any more at pub pumps with a cut to alcohol duty for draft drinks of 1.7%, cutting a penny off a pint.
“The decision to run with the introduction of VAT to private school fees is concerning and disappointing as is any tax on education. What the Labour party give generously with one state hand, they take sharply from the private one. However the impact this will have on the education of children who may now need to move schools mid term and the current capacity in the state sector should not be underestimated.
“Increasing the carers’ allowance earnings threshold means full time carers will quite rightly be able to earn more without being financially penalised for doing so.
“No increase to Income tax and NIC as expected but changes to employer NIC contributions will undoubtedly impact on employees as shortfalls have to be filled somewhere. It all comes full circle in the end. Also any extension to income tax and NIC thresholds (beyond what was planned to 2028) would have been pie in the sky anyway as could easily be reversed in a future budget.
Today’s budget may well have aimed to end ’short term-ism’ but as to whether it will be enough to create a new era of long term growth, that remains to be seen.”
Chancellor Rachel Reeves’ Budget statement this afternoon highlighted tax hikes for both working individuals and British businesses.
She told the Commons that the Budget will raise taxes by £40bn with an approach that she believes will achieve growth in the near future.
Reeves shared projections from the OBR, which said CPI inflation will average 2.5% this year, 2.6% in 2025, then 2.3% in 2026, 2.1% in 2027, 2.1% in 2028 and 2.0% in 2029.
Reeved also said the OBR has published a detailed assessment of Labour’s policies for the next decade.
Listing its forecasts, she announced that real GDP growth will be 1.1% in 2024, 2% in 2025, 1.8% in 2026, 1.5% in 2027, 1.5% in 2028, and 1.6% in 2029.