The Budget lowers growth and puts up inflation

The OBR judgement was muted but the figures were clear enough. Growth lower in 2026, 2027, 2028. Inflation  higher those years. They told us the NI increase would lower real wages and reduce profits.

The budget is said to be good for the long term. Any major public sector led project like a wind farm, nuclear plant, new railway or new hospital will not be delivering any revenue or public service this decade. The bigger question is which of their projects would ultimately generate enough cash to make a return?

The government has some more business like aspirations. It says these public investments should return at least as much as a government bond. Surely a bigger return is needed? They say they want a 2% a year improvement in productivity in public services. How? Why grant big pay awards this year without productivity deals?

More money goes into the NHS without the promised clear reforms. More money chases the eventual completion of HS 2 from Birmingham to London with still no link to the North. More money chases the hope of school rebuilds which Conservative Ministers planned but in many cases officials, Councils and schools did not deliver. .

The underlying issue is about senior often well paid public sector management. When will a government tackle this essential failing feature of the system?

128 Comments

  1. Mark B
    October 31, 2024

    Good morning.

    I did not follow the Budget as I had better things to do. Why should I listen to someone who does not, nor cannot tackle the Elephant in the room of out of control Public Spending and the inflation of the State.

    NIC (not sure which one it was) is just another form of tax. It does not, unlike many are led to believe, go on the NHS and / or the State Pensions, it goes into the general pot as stated by our kind host here many years ago when I asked him on this.

    For the government, and indeed this government, ignorance (of the people) is truly bliss.

    1. Ian wragg
      October 31, 2024

      I watched the preening performance which was the budget. It made no sense considering no idea Kier says they are the party of growth.
      Everything from the selling off of family farms no doubt to be scooped up by foreign buyers to increasing employers NI, is anti growth and spiteful. A farmer may be theoretically rich owning 100 acres at ÂŁ9k an acre but practically just scraping a living. Death duties will force them to sell off a portion of land making the farm unprofitable. This of course is the idea so the land can be carpeted with windmills and mirrors.
      The bond market is above 4% and probably has a way to go making servicing the debt ruinous.
      No, from a purported chess champion this was a deathly move.

      1. Lifelogic
        October 31, 2024

        It seems Reeves did indeed play in the British Under 14 championship. She came 26th

        So – not a champion. Reeves was beaten by the actual British Under 14 Champion, the composer Emily Howard. Incidentally Rachel’s sister Ellie came 17th in the Under-12s tournament at the same time


        But in a knock out being beaten by the champion then I suppose she might have been the second best, though it was a girls only competition and most girls & women I know have far more sense that to be obsessed by such a game. Several men on the other hand


        Either way the budget is a total disaster. Either she wants to destroy the economy or she is very foolish indeed.

      2. Mickey Taking
        October 31, 2024

        she may be able to play on for a long time, first sacrificing pawns, then her key pieces, but the day of reckoning and being told ‘Check mate’ is her certain fate.

        1. Berkshire Alan
          November 1, 2024

          MT
          The problem is, she already has the taxpayer “Cheque” book out, and is busy filling in all of the pages before needing to surrender her position.

    2. Peter Wood
      October 31, 2024

      The Tories put our economy into a parlous condition, wasting so much money on Covid. This government no longer has the luxury of ‘creating money and spending’ our way out of any new national threat. If the world turns nasty, and those that watch these things suggest we are in more dangerous times than during the cold war, then we will be over the economic cliff before Starmer can say ‘where’s my new Armani suit?’ Confidence in ÂŁ is in question because state debt is still rising.

      https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/bulletins/publicsectorfinances/april2024

    3. David Andrews
      October 31, 2024

      The increase in Employer NIC will accelerate the substitution of jobs for people by automation, ML and AI driven alternative ways of getting work done. The CEO of Google, an AI pioneer. (Deep Mind etc), said yesterday that 25% of all their new software is now written by AI agents, before being checked by human software engineers. That is the way the world of work is going. Labour has just put afterburners on job destruction.

    4. Ian B
      October 31, 2024

      @Mark B – ‘ NIC is just another form of tax.’ If it was ring fenced to do what was sold as its intended purpose we, the Country would be in a much better place than we are now. Insurance to get you the best medical care (NHS Services privatised), real pension investment providing real pensions. Instead successive Governments have seen it as pure tax and decided to run the Worlds largest Ponzi Scheme

      1. Mark B
        October 31, 2024

        +1

      2. Bryan Harris
        November 1, 2024

        +1

    5. Peter
      October 31, 2024

      Another Sir John Redwood piece on Conservative Home 30/10/24 :-

      ‘ All this redefines government. It makes this new government one of the public sector, by the public sector for the public sector.

      It divides the world into a favoured public sector that deserves more staff, more money and more projects, and a private sector that needs to pay more tax, accept more regulations and accept its place is out in the cold. A former government lawyer as PM works with a former junior employee of the Bank of England as Chancellor to paint a bleak picture of the U.K., blame the past government and seek change through more public sector spending and borrowing.’

      All very true. I don’t see the Conservative Party offering an effective response though.

      It was also a dire Conservative gover that led to the election of these people in the first place.

      1. Peter
        October 31, 2024

        Also on Conservative Home :-
        ‘Finally, Brits are quite clear who they blame for the current state of public finances, with only one-in-nine thinking the Conservatives left the country in a good economic state for Labour to inherit, versus three-in-five who think the Tories left Labour with a bad economic situation to manage.’

        (The Conservatives must negotiate a tricky path in their Budget response
        Dr Patrick English)

        Maybe that’s why they don’t say much. Perhaps they hope buyers remorse will see them win the next election?

        1. Peter
          October 31, 2024

          Meanwhile, further news of the Southport terror attacks and information about Islamist connections was delayed until after the Tommy Robinson march in London.

          Starmer and co are on a very sticky wicket.

          This will not go away – or end well.

          1. Lynn Atkinson
            October 31, 2024

            +1 let’s have justice for the people jailed for asserting this was an Islamist/asylum attack.
            We don’t need to speak about the case itself, but the role of the State in crushing those who spoke the truth is unforgivable. They KNEW they were propagating misinformation.

          2. Lifelogic
            October 31, 2024

            Indeed but alas they cannot bring that Grandfather given two years Peter Lynch back to life. I have the judge and Starmer are feeling some remorse – but I rather doubt it. Starmers (and Ed Miiband’s plan to freeze pensioners will kill far more.

        2. Mark B
          October 31, 2024

          If they do win the next GE, it will be on the lowest turnout in history.

  2. Lifelogic
    October 31, 2024

    Indeed almost every measure is anti-growth, will push up inflation, interest and mortgage rates and make the UK even less competitive. After 14+ years of the Con-Socialists doubling state sector debt and giving us the highest taxes for 70+ years this budget is the complete reverse of what was needed.

    The biggest, tax raising budget in history, but these tax increase will quickly strangle the tax base. people and businesses will adjust or leave and will end up raising less tax not more in the end. This while doing huge harm to many good schools, businesses, pushing Non-Doms away while killing growth and jobs.

    A grade one disaster, politics or envy especially this moronic government picking winners will be a disaster.
    Plus on top of this disaster they have the other moronic lunacy of net zero and rip off energy.

    1. Lifelogic
      October 31, 2024

      Plus the moronic counterproductive wars on landlords, petrol cars, private schools, Non Doms, fossil fuels, the road blocking, the slightly wealth and the the hard working.

      Yet they say the want growth.

    2. Lifelogic
      October 31, 2024

      Liz Truss (who had come a long way from her LibDim days) said the budget was awful & it will accelerate the doom loop we are already in. They do not understand what is driving the economy.

      She is correct. For growth we need cheap, on demand energy, lower & simpler taxes, far less government & far less red tape. This budget and Labour are delivering the complete reverse and in vast quantities.

      1. Lifelogic
        October 31, 2024

        She claims the average US citizen is ÂŁ25K better off PA and energy cost there are 1/4 of UK prices.

        1. Ian B
          October 31, 2024

          @Lifelogic – I can confirm those statements are true. The downfall of Truss has since been shown to be political manipulation by the BoE and others in the market place the day before any of her plans where annonced. She didn’t as stated by some cause the collapse of bonds and confidence the BoE has shown they had already done that.

          1. Lifelogic
            October 31, 2024

            Indeed they are the moronic lockdowns and the vast waste, borrowings and QE under Chancellor Sunak.

      2. Mickey Taking
        October 31, 2024

        and it is about time state organisations got pay increase on exceeding targets by stated margins -KPI.
        No increase, no annual pay increase.
        Suggestions: Treasury, OBR, OFxxxx, NHS by each division, Inland Revenue, DVLA, Civil Service by Grade.

    3. Lifelogic
      October 31, 2024

      Have we ever had a worse budget? One might have thought that, as the first Women Chancellor delivering a budget (something she seems so very proud of) she might have wanted it not to go down as the worst one ever.

      NI up, IHT up, road tax up, stamp duty up, CGT up, allowances down, government spending & waste up, energy costs hugely up, bus fares up 50%, winter fuel pensioner allowance removed, interest rates up
 UK economy heading down the drain. All of which tax working people and the NI increase is clearly another broken promise.

      Once again Hoyle has disgraced himself to try protect Starmer over the many Southport Case lies & deceptions and his blatant two tier policing and justice system. Who instructed him to do this? So who knew what and when about this “Welsh” lad.

      1. Donna
        October 31, 2024

        They clearly delayed announcement of the terrorism charges to late on the day before the Budget in the expectation the MSM would minimise coverage and wouldn’t ask awkward questions …. “a good day to bury bad news.”

        1. Lifelogic
          October 31, 2024

          Life 9/11.

          1. Lifelogic
            October 31, 2024

            Like 9/11 who was that Labour “political” adviser who tweeted this on 9/11. Hard to be too cynical sometimes!

      2. Stred
        October 31, 2024

        Liz Truss, on Talk Radio, said that the PM is always told about terrorist incidents and the supression or other actions would be agreed between the security services, police and no 10.

      3. John Hatfield
        October 31, 2024

        Of course taxes are up. She had to fill in the “black hole”. 🙂

      4. Mickey Taking
        October 31, 2024

        I thought being a female choice Budget we would have reduced VAT on shoes, handbags, little black dresses, salon haircuts, perfumes etc. How disappointing.

  3. agricola
    October 31, 2024

    Yes, more taxation (NI) and regulation will work against employment. Entrepreneurs will move out or seek incorporation off shore.

    The word investment has been hijacked to largely mean day to day running costs, in relation to government run activity. The public sector is left untouched in terms of size and productivity.

    The engine of the economy, SMEs, are disinsentivised, as is investment from inside or outside the UK. There are better places to put your money.

    This path is communism with a different title. It guarantees the history of Labours financial failure, and you and I will fund it. It also contains blatant acts of class warefare, some are now more “worker” than others. Why is this, malevalence apart, not one of the front bench has run a whelk stall in the real world. They may as well have descended from Mars. Enter stage left the IMF.

    1. Lifelogic
      October 31, 2024

      Investment by this government and for the last 20+ years is just pissing money down the drain on things like Net Zero, HS2, lockdowns, net harm Covid vaccines, worthless degrees, the dire NHS…

      Liz Truss is on the latest Planet Normal podcast saying the sensible and obvious things. But not obvious to this government alas.

    2. Donna
      October 31, 2024

      When the WEF said their aim, supported by His Hypocritical Majesty of Windsor, is that “you will own nothing” they clearly meant it.

      1. R.Grange
        October 31, 2024

        Especially farms, Donna. The globalist have big plans for them.

    3. IanT
      October 31, 2024

      I’ve just been doing a back of envelope exercise to see what the impact would have been on my business if I still ran a small SME today. I adjusted salaries to 2024 levels using BoE inflation calculator and then worked out ENI before and after budget. The ENI paid per full time staff menber increases by 23 46%, so assuming my numbers are correct, in total that is an extra ÂŁ43,234.50 pa. I’ve just added a ‘ghost’ member of staff to my payroll!
      That won’t help my business grow will it?!

  4. Geoffrey Berg
    October 31, 2024

    The biggest underlying problem with the budget and Labour’s economic plan is that it envisages an increase in public expenditure from the pre-pandemic level of 39% of Gross National Product to 44% in 2029. That not only means people (rather than government) will be able to themselves choose how to spend less of their money but it will also hamper growth, meaning less overall money for both people and government to spend and the public sector being inherently and ‘irredeemably’ (which is where I differ from Sir John Redwood) inefficient will mean poor value for the extra public expenditure.
    The public should beware the awful underlying reality that politicians and civil servants like high levels of public expenditure however useless or inefficient it may be because it is their empire which they control whereas they don’t control the private (wealth-generating) private sector which by contrast is controlled by how ordinary people choose to spend their own money.

    Reply I have consistently identified around ÂŁ50 bn of waste and undesirable spending and made clear I want lower totals.

    1. Geoffrey Berg
      October 31, 2024

      Sir John, I know you to your credit want less public spending (though not as much less than I) but the difference of opinion I was alluding to is that you seem to believe that public expenditure can potentially be managed efficiently to give good value for money whereas I believe that due to human nature (particularly that people will not work diligently and efficiently at a job they are not motivated by, usually by incentive money for success and loss of job for failure) the public sector is inherently inefficient and that simply cannot be altered over the long term.

      Reply ÂŁ50 bn is not the limit of my ambition, just the most obvious waste. I like you wish the government does less, starting by leaving energy supply to the private sector

    2. Lifelogic
      October 31, 2024

      ÂŁ50 billion? There is more like ÂŁ500 billion wasted PA by government.

  5. David Andrews
    October 31, 2024

    It will end badly. Very badly. That is the track record of reckless Labour government “investments”. I am an AIM investor whose estate will now be hit with a 20% IHT bill, similar to the new charge on farmers. This totally changes the risk profile of such investments. I would not have invested in such high risk ventures if such a tax was in place at the time. Such businesses will now find it much harder to raise capital. In effect this is a retrospective tax on my earlier decisions to invest in AIM companies. Why risk investing at all if the government then decides to grab a big chunk of it later if it proves to be successful. Add on the Employers NIC at 15% plus the inflationary impact of the government borrowing binge and company profits and cash flow are bound to take a hit. This will cut growth. Many AIM companies are quite small (revenues under 100 million), and bet on new technologies to make their way in global markets. A few will make it but others struggle and will fail. It has now become much harder for them to generate the profits and cash flow necessary to support growth

  6. DOM
    October 31, 2024

    Expanding the size of the Socialist state is Labour’s primary purpose. Economic growth is merely an afterthought.

    If you despise Socialism do not vote Labour and Conservative. These two parties are parasitic and seek only to strengthen the status quo for their own benefit.

    1. Lynn Atkinson
      October 31, 2024

      Remember that Reform paid ‘Hope not Hate’ to vet their candidates. Look them up, what sort of people do you think they would have approved?
      In the light of this, how exactly do you advise the electorate vote?

      1. Mark B
        October 31, 2024

        Lynn

        Peter Hitchen for me has got this right. Labour and the Tory’s are like two corpses sitting back to back propping each other up. If one were to be removed the other would topple, such is their reliance on ‘this game’. Both parties are self serving and clearly do not have the nations interest at heart.

        Reform can be seen as a spoiler and would force one or both to act more in the interests if this nation than each other. Reform are not my cup of tea and you will not find me here ever praising them, but the current LibLabCON cartel must be broken, and Reform are the only ones able to do this. HnH are government backed front organisation with links to people on Millbank 😉

        1. Lynn Atkinson
          October 31, 2024

          The people don’t choose Reform Candidates either.
          The point is that the thing that has killed democracy was allowing the political machine to say who sits in parliament.
          It is we, the people, who must recover our right to propose anybody we like, select those we know and like, and fight to get the constituency to elect them.
          There is NO ALTERNATIVE SOLUTION.

      2. Philip P.
        November 1, 2024

        No, Lynn. Reform paid Vetting.com to vet their candidates. HnH just did a better job than Vetting.com of teasing out what some of them had said on Twitter X, etc. Perhaps Reform would have done better to hire HnH in the first place!

  7. Wanderer
    October 31, 2024

    Not as bad as I expected, given all the negative hype. More spend, more tax. That’s pretty usual in recent years…I don’t think it’s too different from what the last government would have done.

    Not that I’m happy with this situation. We need a government that takes back control from the bureaucracy/quangocracy by cutting the state sector down to an affordable size and reducing its interference in so many aspects of our lives.

    Until that happens, the red-box budget is just spin and showbiz.

    1. Lynn Atkinson
      October 31, 2024

      +1. I don’t believe a budget from Hunt would have been an improvement. Attacking high taxes lies not in the mouth of Sunak & Co.

      1. Mark B
        October 31, 2024

        +1

  8. Donna
    October 31, 2024

    The message of this budget is “don’t take responsibility for yourself; don’t aspire; don’t save; don’t buy a house; don’t invest; and definitely don’t start a business and employ anyone.”

    Anyone who lived through the ’70s knows what’s coming: stagflation.

    At least the music was good in the ’70s. It won’t be this time.

    1. Sharon
      October 31, 2024

      Donna

      Couldn’t agree more!

    2. MWB
      October 31, 2024

      The message of this budget, and government is, do not work in the private sector, but get yourself a public worker job.
      One of the first reported utterences of Reeves after the election, was that she thought public workers were the backbone of the country and the most valuable. Hence the massive pay rises and protected pensions.
      I am now retired, but if I was setting out into the workplace, I would see the public jobs and pensions for life, and wouldn’t be considering any private jobs.

      1. John+C.
        October 31, 2024

        It’s two-tier of course. Public institutions will have NI reimbursed. This is not sarcasm, it is stated policy.

    3. Lifelogic
      October 31, 2024

      +1 leave the country, work less, get a job in the state sector or live on benefits seem to be what they want.

    4. Mark B
      October 31, 2024

      At least the music was good in the ’70s.

      Ahhh ! The 70’s music on YouTube – Strawbs – Part Of The Union (1973)

    5. M.A.N.
      October 31, 2024

      And the food. Black Forest gateau was nice.

    6. Mickey Taking
      October 31, 2024

      and another message to offspring ‘ don’t expect an inheritance, the bastards are out to bleed me dry’.
      I will be spending whatever I can get out of my PRUDENCE all these years.

  9. Mike Wilson
    October 31, 2024

    I am puzzled. Raising Employer’s NI will surely mean that public sector bodies will have to pay more NI – so will have less to spend on providing services?
    Or will their budget be Increased so they can pay the increased NI? Which feels like taking money out of one pocket and putting it in another.

    1. Dave Andrews
      October 31, 2024

      My guess is they will put the money they take out back in again, and then seek to claim credit for increasing public investment!

      1. Lifelogic
        October 31, 2024

        exactly

    2. Narrow Shoulders
      October 31, 2024

      Apparently the NHS has been given an exemption.

      But not social care providers because some people have to pay for those as well as get taxed to pay for them.

      1. Lynn Atkinson
        October 31, 2024

        I am hearing social care providers declaring that they will be closing their businesses.
        No place for old people, expect ‘assisted dying’ to include ‘assisted decision making’.

    3. Berkshire Alan
      November 1, 2024

      Mike
      I think they have been granted an exception, and so it will not apply to the NHS and Government run organisations, from comments made subsequently but I am happy to be corrected.
      IT will however affect those privately run organisations like Hospice, Charities, GP surgeries etc etc.
      Thus we now have two tier taxes, as well.
      Seems like you have extra privileges if you work for the Government in some way or another.

  10. Cliff.. Wokingham
    October 31, 2024

    Sir John,
    The newly formed “Office for Value for Money” was included in the budget yesterday. I wonder if this new role will actually be value for money.
    This is how HMG describe it on their website….
    “The Office for Value for Money provides advice to the Chancellor of the Exchequer and Chief Secretary to the Treasury to ensure that value for money is at the heart of government’s spending decisions.”

    I would have expected government to seek value for money anyway. One may have assumed the OBR would have done it as part of their role.

    1. Donna
      October 31, 2024

      Its just another “justification” Quango. Every time the Socialists want to squander ÂŁbillions on one of their moronic projects the Office for Value for Money will declare it viable, thereby giving them political cover.

      Johnson was at it recently. The reason he allowed 3 million legal immigrants into the country in just two years …… because the Migration Advisory Committee recommended it! Never mind the fact his Manifesto contained a “promise” that immigration would be controlled and reduced.

    2. Berkshire Alan
      October 31, 2024

      It means Cliff, the Politicians do not have a clue actually what value for money means, so someone else has to tell them.
      The problem is it will be politicians who will recruit these people, and they do not have a good track record one such appointments.

      1. Mickey Taking
        October 31, 2024

        it brings me back to the old saying ‘how much does it cost to change a light bulb in the Civil Service?’

  11. Viv Evans
    October 31, 2024

    The one thing which will stick in people’s minds is that of the ÂŁ40bn tax increase in this budget more than half will go to the NHS. People, i.e. tax-paying voters, won’t need to be expert economists to judge the government on their ‘success’. No amount of spin will conceal the fact that, despite this money they will still not be able to see their GPs, A & E will still be full. For all their lives, the NHS has been in – politically manufactured’ “crisis”. Now, with even more money, it’s not unreasonable that they wish to see results. Moe ‘jam tomorrow’ won’t cut it.

    1. Lynn Atkinson
      October 31, 2024

      Yes and I so remember Gordon Brown’s bid for glory when he doubled the NHS budget. They stopped claiming they were underfunded for almost 3 weeks!
      The political class never learn a single lesson.
      We have to change the cattle on the premises. We must select our own candidates. Nothing but the best.

  12. Donna
    October 31, 2024

    I just watched the Shadow Chancellor (one Jeremy Hunt) say that if he’d delivered a Budget yesterday instead of Reeves, it would have been very different. The first thing he said was “We all face pressures in public finances, we all face an economy recovering from the Pandemic, but the big question is HOW DO WE GET MORE MONEY INTO OUR PUBLIC SERVICES LIKE THE NHS WITHOUT RAISING TAXES THAT DAMAGE ECONOMIC GROWTH.”

    And this supposedly, is the Opposition to Socialism. All the Not-a-Conservative-Shadow Chancellor is concerned about is how to shovel even more money into the bottomless pit of the NHS and other unreformed, inefficient public services.

    1. Ian B
      October 31, 2024

      @Donna – he is not the opposition, he was when he had a function of doing something like being the Health Minister then the Chancellor

  13. Sakara Gold
    October 31, 2024

    Once again, a British Chancellor produces a budget that failed to mention the word “export.” Not once. Neither did the lady mention manufacturing. If we are to climb out of the humungous drag of the national debt – now at about 100% of GDP – we need manufacturers who export

    Judging by the inches-high howls of protest from the right-wing press, Reeves must have got something right. Her budget has displaced the usual tedious anti-EV, anti-net zero, anti-renewables pro-fossil fuel propaganda to page 7

    1. Donna
      October 31, 2024

      “Range-challenged electric vehicles could face further sales disincentives with a proposal from Britain’s top engineers that battery sizes be reduced by one third. In a just-published report on the supply of critical materials for Net Zero projects, the U.K.-based National Engineering Policy Centre (NEPC) points to an obvious fact – there isn’t anything like the amount of raw materials available to transition to Net Zero and most of the extraction processes required are an ecological disaster.”

      Care to comment?

      https://dailysceptic.org/2024/10/30/electric-vehicle-battery-size-should-be-cut-by-one-third-due-to-acute-lithium-shortage-say-u-k-s-top-engineers/

      1. Mickey Taking
        October 31, 2024

        in order to reduce the damage to roads ie pot-holes being obvious, the weight of EVs, especially the longer range ones must be cut, in other words making them all low-range vehicles. Shot in foot?

    2. Lynn Atkinson
      October 31, 2024

      Are you in the market for a few EVs? I know a number of businesses selling at a great price, 20% of new price.

      1. Mickey Taking
        October 31, 2024

        at 60% discount I might be tempted.

  14. Narrow Shoulders
    October 31, 2024

    Shocking approach – spend money first, ask questions later, if at all.

    Student politics, don’t they realise it is not their money it is ours.

    1. Ian B
      October 31, 2024

      @Narrow Shoulders – ‘it is not their money it is ours.’ that’s the point ‘they’ have made the Laws to steal from your endeavours, your wallet, your bank account. To Government Tax is their earned income to do what they wish with.
      Reeves like all her contemporary stood at the dispatch box and said time and time again ‘We’ will spend, ‘We’ will fund, ‘We’ will invest, each time inferring it was Hers and actual Government money she was handing out. Governments do not have Money.

  15. formula57
    October 31, 2024

    A budget for corporatism and thence stagnation.

    The early withdrawal of winter fuel allowance from pensioners is unmatched by comparable measures affecting other groups of individuals so takes on the appearance of a targetted attack borne of who knows what variety of ill-will.

  16. Roy Grainger
    October 31, 2024

    Starmer was very clear during the election campaign that the NHS would get no more money unless it reformed but now they’ve been handed ÂŁ20bn extra with no reforms at all. I wonder why Starmer thinks more money will improve the NHS when it has been proven in the past that it doesn’t ? Well, I suppose he knows it won’t but what it will do is provide pay increases for the assorted NHS union members.

    HS2 – I see they’re paying for the tunnel to Euston but not the station at the end of it. Uh ?

    1. Mike Wilson
      October 31, 2024

      A 13 mile long tunnel basically following the route of the A40 out into the Buckinghamshire countryside. At what cost?! At least 3 times budget no doubt. Why couldn’t they make better use of the many existing lines into Marylebone, St. Pancras, Euston and Kings Cross.

      1. Mike Wilson
        October 31, 2024

        And, just looking at the route again, it will do under lots of houses. Do ‘they’ need permission to put a tunnel under your house? Will they indemnify everyone against settlement claims? (As someone who did some tunnelling in my first career as a construction engineer, I know there won’t be any issues, but most householders would be terrified at the idea of a huge tunnel constructed beneath their home.)

  17. Mickey Taking
    October 31, 2024

    A budget for growth? Nothing to see here, move along…
    A continuous stream of ‘robbing Peter to pay Paul’ from the incredible boring delivery Ms Reeve.
    The raucous fervour of the government side cheering every sentence as if ‘we found gold in them far hills’
    was so tedious I had to turn it off.
    Eventually I gathered that she is robbing everybody that tries to create growth, secure their future, sets out to tax inheritance.
    A bleak day for the UK.

    1. Lynn Atkinson
      October 31, 2024

      The first of many bleak days
.

  18. MPC
    October 31, 2024

    Was your piece in todays Guardian all that you wrote, or was anything edited out?

    reply Haven’t seen it

  19. Dave Andrews
    October 31, 2024

    I’ve crunched the numbers, and for my company the employer’s NI change is equivalent to a 2.81% rise under the existing arrangement.
    This won’t destroy our business, but it will mean less resources for investment and staff bonuses. For other businesses it will mean further incentive to offshore their labour requirements.
    The various multinationals that enjoy practically zero rates of tax will breathe a sigh of relief as they remain essentially untouched – and Labour keep going on about those with the deepest pockets paying more!
    Good to hear Nick Robinson on R4 this morning take the Chancellor to task. Normally the BBC gives lady socialist politicians an easy ride.

    1. Mike Wilson
      October 31, 2024

      Whilst I realise that some multinationals remit their profits abroad as a ‘management fee’ to their parent company, surely they can’t (and aren’t) dodging Employer’s NI.

  20. Berkshire Alan
    October 31, 2024

    Well we got what we expected, higher taxes, more government spending, more waste, more inefficiency, less incentive to work, save, or invest.
    Given pension pots are now included in your estate for inheritance tax, there will be a lot more people paying it.
    The problem is given the pension rules, there is little you can do about it.
    Disgraceful to move the goalposts on such a restrictive investment for the future, its like retrospective taxation.
    A pension clearly is probably not now the best way to save for retirement for many.
    Afraid we got into this financial state with massive covid spending, which all Parties subscribed to.

    1. Mike Wilson
      October 31, 2024

      Well, at least she didn’t tax savings interest more. Which I was worried about. I was sure she’d go for savers to get them to spend, spend, spend. Once we’re all skint, we’ll be dependent on our blessed politicians and ‘the state’.

  21. Paul Freedman
    October 31, 2024

    Labour are very good at semantics, for example government spending is ‘investment’, Socialists are ‘progressives’, the economic cycle of a nation is ‘Tory Boom and Bust’, ‘working people’ – still yet to be defined.
    Removing all this cobblers we see in yesterdays budget a high spending, Socialist government which still does not understand the economic cycle and what to do.
    We are recovering and still have years of this cycle still ahead of us, eg the UK output gap is -1.03% (OECD) so there is still material capacity. Just when the time is ripe for finding efficiency gains, spending cuts and tax cuts to stimulate growth and prosperity for the rest of this cycle they do the opposite and increase spending by 9% and present a huge headwind to economic growth.
    Yesterday was a mistake and a wasted opportunity. The country desperately needs a responsible, economically competent government.

    1. The Prangwizard
      October 31, 2024

      Socialists, ie. our PM and his ministers have no interest in understanding markets. It is their wish and intention to destroy them, by any means. They don’t make mistakes. All they wish is destruction of individual and company freedoms.

      They don’t care if they are criticised, these are untouchable, they know it and will continue with introducing Marxist controls.

  22. J+M
    October 31, 2024

    As Winston Churchill so pithily remarked, the private sector is not an evil to be countered or a cow to be milked; it is the horse that pulls the whole cart. (Or words to that effect.)

  23. Margaret
    October 31, 2024

    The biggest insult is to the pensioners who have worked all their life and are still working late into their seventies to make ends meet.Why do they always penalise senior Brits.? They can always find money for the healthy lazy. Those seniors at home need heat 24 hrs a day whilst those at work can switch off heating.

  24. Bill B.
    October 31, 2024

    So, the Socialists once in power would tax the better off. Who knew?

  25. Nigl
    October 31, 2024

    Liz Truss’ budget went for growth but was shredded by the markets and then Tony Blair wing of the Tory party, who despised her, gave her the elbow.

    This Labour government and subsequent budget is the direct legacy of the Tories and they should be ashamed. Even worse both potential leaders were key players.

    The first task to any redemption is admitting guilt. Obviously thick skinned politicians will not do this so your party’s future is bleak. Certainly I will neither forget nor forgive.

  26. Ian B
    October 31, 2024

    The upside for labour if they hold their nerve and resit further temptations, while the next 2 years will be purgatory for everyone, the natural flow means towards the next election things will have improved over those actual 2 years.

    This as we know is what Sunak and Hunt contrived when they put up prices raised taxes, caused inflation, higher cost for everyone, then as it all panned out rebalanced they claimed a victory for slowing something they had contrived to happen – thinking it was enough to get re-elected.

    We still have the highest Taxes and Borrowing in more than 70 years, thanks to the faux Conservatives and their fellow travellers Labour – high tax and borrowing has become embedded in UK structures. Productivity keeps falling, government policies(they call it investment) has focused on UK Taxes(Wealth) being sent abroad, never to return. So-called UK Government investment does not fund the UK it funds Foreign Domains, UK Taxpayer money does not circulate in the system creating an economy. We have Governments that maliciously and deliberately cause UK Wealth to leave the Country

  27. Original Richard
    October 31, 2024

    The budget shows the direction in which we’re heading.

    We have a PM and majority in Parliament who have very strong Communist sympathies. They wish to expand the state (employment and control) and destroy private personal wealth and SMEs with unending restrictions and regulations coupled with high, wasteful public spending to justify high taxation.

    The perfect vehicle to achieve their aims is Net Zero which is not only eye-wateringly expensive and wasteful of all types of resources but since it will not work will finally destroy our country when electricity (which will be the only form of energy allowed) becomes chaotically intermittent and we rapidly descend into third world poverty and chaos.

  28. glen cullen
    October 31, 2024

    And in other costly news –
    475 criminals arrived in the UK yesterday from the safe country of France 
.sadly, with four deaths according to French authorities

    1. glen cullen
      October 31, 2024

      Update – 564 in 12 boats …..thats an invasion that the royal navy, border force nor the royal air force surveilance never saw …..but the RNLI did ?

    2. Mark B
      October 31, 2024

      471 Criminals who should be on the first Eurostar back !

      Very sad about those who lost their lives. But if the French took them back and our government stopped encentivising them to come, then this would not happen.

  29. Nigl
    October 31, 2024

    And in related news the OBR makes it quite clear that Jerry Hunts Treasury was not honest with the ‘black hole’ information ‘hiding’ overspends including £5 billion on migration.

    Pots and kettles spring to mind.

    Reply The OBR identified some overrun in year which is normal and gets picked up in autumn supplementary estimates if it cannot be managed down in year. The government usually forecasts some success in cutting illegal migration and has often had to revise upwards. There are also in year underspends which have on this occasion not got the same attention. The largest part of the black hole is spending decisions taken by the new government. There was a contingency provision that covered the migrant overrun.

  30. Ex-Tory
    October 31, 2024

    The new IHT rules for farms could mean endless generations of farmers having to spend their whole working lives paying off the IHT bills of their predecessors.

    1. hefner
      October 31, 2024

      How much in farming subsidies have they got? When we got out of the EU one of the first things that was discussed was how these EU subsidies would be replaced.

      gov.uk 04/01/2024 ‘Biggest upgrade to UK farming schemes introduced by the Government since leaving the EU’.

      And (as usual) there are huge differences between small farms and mega-industrial farming estates, joyously conflated in the kind of comments above.

      1. Sam
        October 31, 2024

        Subsidies given to farmers will not be any help to a farming family when they are faced with an inheritance tax bill of six figures after a death in the family.
        Where can they get the cash from?

        Your sarcastic and dismissive attitude to many family farms now worried about their future survival is very poor hefner.

        1. Mickey Taking
          October 31, 2024

          and I for one want to eat and drink the products made available by British farmers.

      2. Mark B
        October 31, 2024

        The subsidies to our farmers came from the UK Government via EU Contributions. Remember, only Germany and ourselves were net contributors. France came third but recieved a great deal in the form of the CAP and access to British Fishing Waters.

      3. gregory martin
        October 31, 2024

        Such subsidies to which your refer were not to farmers but to supermarkets to lower prices so that consumers could be supressed by Governments; not facing the realistic additional costs borne by farmers in meeting standards required by Europe above the base of world competition producing inferior imports using methods and materials prohibited in this country./EU
        Supermarkets and processors base their tendered purchasing price at or slightly lower than the actual cost of production, on the base of these subsidies.
        Once we had left EU, English government replaced subsidies on a falling scale, while launching ELMS payments slowly, so slowly, that last year 2023 the budget was underspent and funds returned to Treasury. This year, due to election purdure, and sloth, the 2024 scheme has yet to finally agreed, payments not made and even flood reduction payments held up.
        Now a budget measure to , in effect, seize 20% of asset value on inheritance, with the implied repeat demand on each generational progression.

        Reply A lot of farmers lost subsidy as they did not like the terms of ELMS

      4. Lynn Atkinson
        October 31, 2024

        Farmers were always on a sticky wicket. Because of the tax breaks of owning farmland, the price per acre was driven up by the city types looking for tax breaks, not for ploughed fields.
        The notional wealth of farmers then translates into loans for big expensive machinery and more. So with a paltry income they are encouraged to run up huge debts secured on the distorted capital value of the ‘farmland’. The higher the value per acre the more impossible it is to wrest a profit per acre.
        Eventually only non-farmers can afford to own farms. Non farmers are not expecting to make money farming and so don’t worry about production. Their tax killing has just been wrested from them.
        Never take a government bribe, buy farmland only if you intend to farm.
        If you buy ‘tax breaks’ it takes only a fraction of a second for the Chancellor to break you by reversing the legislation.
        If the value of farmland reverts to it’s real value, real farmers may well have no Inheritance Tax problems at all.

        1. hefner
          November 1, 2024

          As usual my answer to Sammy was lost.
          So thanks for that, Lynn.

          1. Martin in Bristol
            November 1, 2024

            Who is Sammy?
            You’re being all grumpy again hefner.
            That’s why your vital posts get lost.

          2. Sam
            November 1, 2024

            70,000 family farms will be impacted by these new raxe changes.
            You seem to think it it of no importance hefner.
            Less UK food production, more imported food.
            How does that get us to Net Zero?

  31. Ed M
    October 31, 2024

    Sunak is light years ahead in ability than the current Tory leader contenders.
    With Sunak and Hunt we have a hope of rebuilding the Tory Party – not with the others.
    Also, when Rachel Reeves worked in B of E did she work in senior executive position – or in admin (honest question)?

    1. Rod Evans
      October 31, 2024

      Ed, I am told she only worked there for one year. That one year was sufficient time for her to teach the BoE how to lose ÂŁbillions selling off bonds early at at massive loss.
      Her role in the bond selling office may be just a rumour….

  32. a-tracy
    October 31, 2024

    Perhaps the Union leaders have said they will behave and take off work to rule if they stuff their mouths with gold.

    I read that a public sector organisation was held back by old, out-of-date practices like sending faxes (which most private businesses, including small businesses, did away with 10 years ago); I just wondered if that is similar in all public sector organisations?

    I’ve heard private sector nurses say the equipment in the public sector is often much better and more modern but not enough people are willing to learn or can use them.

    1. Mickey Taking
      October 31, 2024

      the Football Association still insist on received faxes prior to Player transfer deadline detailing who, Club where from, Club where to….

  33. a-tracy
    October 31, 2024

    All I’ll say about that budget is that it’s a disincentive. If my husband and I can’t transfer our pension to each other if one dies prematurely, we might as well not bother. There’s no point working as hard; we may retire earlier now. I’ve often said that Labour hates entrepreneurs, growing small business owners, and all employers.

    I was planning on a couple of new staff members, but while I’m crunching the figures, I won’t bother running them. This week, a client told us his boss said he can no longer use us if we can’t shave 20-25% of our rates because a couple of subbies have said they can do the work much cheaper. Those subbies have no employers NI; well done Reeves you’ll get even less tax and more of that moving forward.

  34. Stred
    October 31, 2024

    In reply to a question about the decision to tax family farms out of existence, someone at the Treasury said that only 2000 farms pa would be affected. The tax is paid over 10 years, so if a farm is worth 2 million the tax gained pa would only be a few 100 million. Family farms are run very well otherwise they wouldn’t survive. I have a feeling that this decision to destroy them may have been take on the line of the attempt by the Dutch government to grab their farmland for UN agenda. Why destroy and efficient industry contributing to GDP for a very small tax increase?

    The big increase in minimum wage must have been well received in the boats crossing the Channel, as the refugees head for their Deliveroo jobs.

    High Street shops and cafes must be working out how much to increase prices to pay for the wages, NI and huge increase in business rates. Stand by for the ÂŁ6 Cup of coffee.

  35. Rod Evans
    October 31, 2024

    Sir John, you know better than most of us, why public sector performance is hopeless and getting worse.
    The unions control the Public Sector, the unions are why public sector IT is so dire and so sclerotic. The fact the NHS communicates with chemists via FAX! Is proof of that.
    We are also told it is the unions who insist on continuing use of FAX in the public transport networks.
    Reeves can talk all day (sadly) about productivity gains of 2% in the public sector safe in the knowledge it will never be met or even measured!
    Getting the ludicrous Uniparty mindset out of Parliament is critical for our future democratic rights. Clearly the LibLabCon all pals together Westminster club atmosphere has ruined political diversity.
    We need new people with new ideas.

    1. Lynn Atkinson
      October 31, 2024

      We need new people with old ideas that worked. Why reinvent the wheel?

  36. Keith from Leeds
    October 31, 2024

    Why is anyone surprised? This is the classic Labour government approach. Take more and more, leaving the people with less and less. Our First Lady Chancellor is a disaster, and it will get worse. Not a thought about the UK’s debt position and the fact they will bankrupt the UK. Every Labour government in my lifetime has ended in a financial mess. In 1997, Labour inherited an excellent financial position, but by 2010, they had got the UK seriously in debt, and there was no money left!
    But Sunak and Hunt also bear responsibility for this budget because they did nothing to lower the tax burden and froze allowances, which is an absolute disgrace. They also refused to cut government spending, which they should have done. The new Conservative leader has a massive job to do, both in opposition and then as PM in 2028/9.

  37. Derek
    October 31, 2024

    I do wonder what that quango, the OBR, is there for. Their history of forecasting is poor and proven unreliable, and it is believed their financial model is inaccurate and/or manipulatable, which should negate many of the results.
    Surely regular consultation with the independent, IFS, would provide a check on the OBR numbers, so why are they not included before any decisions made of the forecasts?

    1. M.A.N.
      October 31, 2024

      Ask George Osborne

    2. Mark B
      October 31, 2024

      It is duplication. Or, to put another way. Jobs for mates 😉

  38. outsider
    October 31, 2024

    Dear Sir John,
    Ass you have often said, we should not put too much faith in OBR forecasts. They may well be right that public spending is rising to 44 per cent of GDP and that, as a result of this Budget, annual interest on government debt will take an extra 0.4 per cent of GDP. These seem to encapsulate the enduring Budget problem that obligations that have nothing to do with the cost of public services, defence or administration require an ever-rising chunk of taxation – eg the overseas aid commitment. The Budget has become like a computer that becomes so clogged up that it works slower and
    slower.

    Why is it that, as far as I can tell, high-spending Gordon Brown managed with just under 40 per cent of GDP before the financial crash? One reason is that the deficits built up during the crash, Covid 19 and the energy price spike are never unwound. Another is that public investment is financed by debt even though it has no prospect of making a financial return.

    Carbon capture and storage has little hope of becoming a profitably exported technology, if only because it requires a lot of huge holes under an adjacent sea. If that ÂŁ21.7 billion were spent on building about 100,000 highly energy efficient homes, it might well earn a decent profit while equally helping climate-wise. Is there any chance that the new value-for-money “czar” will so advise? I suspect not.

  39. Ed M
    October 31, 2024

    Today, Nigel Farage pointed out what is fundamentally wrong with our economy: CULTURE (not politics or economy policy – Sunak made a great speech on politics / economic policy but Farage went much further).
    Farage is right.
    The problem in our country (and in the West in general) is cultural / demise in culture / civilisation.
    We’ve got to grow cultural values to grow the economy!
    1. Work ethic 2. Responsibility for self. 3. Relying on family instead of state. 4. Family values. 5. Patriotism. 6. Being friendly towards neighbours. 7. Eating healthily / taking lots of exercise. 5
    And so the Tory Party needs to work closer with those in the churches, media, education and the arts to promote healthy traditional Conservative values (and re-introduce National Service for a short while).

    1. formula57
      October 31, 2024

      @ Ed M – the culture is much worse than you have referencuied. The drive amongst American entrepreneurs to achieve billonaire status is explained in part by the cultural significance of such a step, for they can expect to be lauded and respected and deferred to in ways unknown here. In the U.K. we might give a nod of recognition to what the Dysons and Ratcliffes have achieve but we do not typically laud them. A U.K. entrepreneur having gained probably ÂŁ5 – 10 million can rest on such laurels as are granted for there is little more recognition to be had.

      1. Ed M
        October 31, 2024

        It’s a shame because being an entrepreneur isn’t just about the money but just the sheer excitement of setting up and running a business (it’s a bit like a game) as well providing good jobs to others so that their families can thrive etc. In fact, it’s not really work – more of a hobby (that pays and which others benefit from too)!

    2. Lynn Atkinson
      October 31, 2024

      To whom can they speak in the Church?
      In fact they need to speak to Putin. No mass mental illness issues there because they retain the age old values with which we were all imbued at our mothers knee.
      Now we can’t even specify what they are for fear of the vengeance of those who admit to mental illness (well they call it mental health, but you never mention anything healthy, you don’t wake up and say, ‘my liver feels great this morning’.) you only pay attention to illness, health is taken for granted by the healthy.

  40. formula57
    October 31, 2024

    Mr. Trump proposes a fiscal measure whereby individuals would enjoy a tax offset for interest paid on vehicle loans provided always the vehicle was made in the U.S.A.. A neat idea surely?

    There are difficulties with replicating such a measure here, not least as there is no similar offset for home mortgage interest. We could, however, clearly do at long last with a Chancellor who puts Britain and its people first.

    Let is also recall British objections pre-Brexit to the comparitively high cost in the U.K. of vehicles manufactured elsewhere in the E.U. were rejected by the Commission, it being taken in my representations about the extra cost of providing right hand drive. Since Brexit no action was taken by the last government, of course.

  41. Stephen
    November 1, 2024

    It’s a massive uptick in the cost of employing someone on minimum wage both in terms of per hour cost and the additional 1.2% national insurance.

    I have no idea how this is going to promote growth and every feeling it will promote stagnation or recession.

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