I’ve never known such an agonising wait for a Budget. Like a trip to the dentist, I’ll be relieved to get it over and done with. This is going to hurt, and Labour won’t be giving us an anaesthetic.
PM Keir Starmer and chancellor Rachel Reeves have made it clear they’re going to pile on the pain.
They’re going after anybody who has accumulated a spot of wealth, which all too often is a codeword for pensioners.
The reason some “boomers” – to use another Labour buzzword – have more wealth isn’t because they’re rich or cosseted or grasping, but simply because they’re older.
They’ve had more time to build their savings or watch their home rise in value, and they shouldn’t be demonised for that. Yet they are.
Millions of pensioners continue to struggle in retirement, particularly those who are just above the threshold for claiming means-tested Pension Credit.
Reeves’ first major political act was to take their Winter Fuel Payment away. Heaven knows what she’s going after today.
One advantage to the extended Budget preamble is that it’s allowed time for Reeves to wake up to the fact that some of her planned tax hikes were plain daft.
She originally planned to hide capital gains tax (CGT) bands in line with income tax, after someone told her this would raise £15billion.
Then HMRC ran some actual figures and found it would actually cut the CGT take by £2 billion, as people clung onto capital gains rather than fill the Treasury’s coffers.
The downside of the delay is that it’s given Reeves more time to dream up tax hikes, without breaking Labour’s general election pledge to leave income tax, national insurance (NI) and VAT untouched.
She’s preparing to slap national insurance on employers’ pension contributions, in a move she reckons could raise £20billion.
Labour furiously denies this will break its election pledge not to hike NI. But working people will foot the bill anyway, as employers will cut future wage hikes to recoup the cost.
Reeves has also walked back on her pledge not to borrow more money. Now she’s going to add £57billion to the national debt, by fiddling the figures.
This is a huge gamble. If the bond markets panic at the £300billion Labour is set to borrow this year, she could suffer her own Liz Truss moment.
In the run-up to the Budget, Britons have been taking evasive action, to see how they can escape what’s coming our way.
It’s probably too late now but for those who haven’t given up hope, I have run through a few last-minute financial planning steps pensioners may just have time to take.
All most of us can do now is wait.
There’s a new stage show in London, a version of the classic Stanley Kubrick movie, Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb.
That title made me think of the Budget, something I’ve done far too much of lately.
Labour tax bomb is flying towards us and there’s nothing we can do aside from stop worrying and learn to love paying tax. We’ll be paying an awful lot of it in the years that follow, so we might as well see the funny side. Let’s just hope Reeves doesn’t blow up the economy, too.
