I just wanted to take this opportunity to highlight some key points from the budget and discuss in a bit more detail what this means for people and businesses in our area.
This budget took the wrong approach…
This Government has hiked taxes to record levels and as a result the OBR has downgraded its growth forecast. The OBR has also estimated that this budget will decrease living standards and cut disposable incomes. This is not what the Government promised at the election last year. This is a recipe for economic stagnation.
Key measures
Income tax
The Chancellor has announced she plans to extend the freeze on personal tax thresholds, costing working families an extra £900 a year. For the first time, this will see the creation of a ‘retirement tax’ as the new State Pension will rise above the personal allowance by 2027-2028.
Business rates
The Government is reforming business rates to account for changes in property valuations. The Chancellor announced that business rates for Retail, Hospitality and Leisure properties will be cut, for those with a rateable value less than £500,000. On the surface, this is a relatively positive move, as it will allow our smaller high-street businesses and SMEs to have some more breathing room. However, as we all know, if one group pays less, another pays more to ensure there is no lost revenue. Thus, this decision will shift the tax burden onto larger businesses, amounting to a stealth tax on businesses with property of a rateable value over £500,000.
High Value Council Tax surcharge
The Government have announced the introduction of a new high value council tax surcharge, coming into effect from 2028, meaning that any properties being valued as over £2million (by 2026 prices) by the Valuation office, will be liable to recurring annual charges in addition to council tax liability.
This is a nonsensical policy which taxes people who have taken risks to build their businesses. It disincentivises people to expand their businesses.
Savings and dividends, and property tax
The Government has cut the Cash ISA savings limit from £20,000 a year to £12,000 a year to encourage people to invest in a stocks and shares ISA, however, this effectively creates a ‘savings tax’, breaking a promise they were elected on.
Additionally, someone who is owns a share of a company and may receive dividends may now be liable for income tax depending on how much their ‘regular’ income tax is.
Those who receive income from property and savings are liable to pay income tax at the same rate as those who receive income from employment. They will not be liable for NICs.
Motoring taxes/Transport
The Government announced that the 5p fuel duty cut will be extended until August 2026, and then gradually phased out over the following few years.
The Government announced a new mileage charge for drivers of EV’s from April 2028. A consultation will be going out on this proposal.
The Chancellor has announced a freeze on rail fare prices, from March 2026 for one year.
Two child benefit cap lifted
This is a decision I’m particularly disappointed in, as it sends the wrong message. It creates unfairness between families who go out and work and assess whether they can have children, and people who have children and claim the benefits of it. Official welfare statistics set out that there are 18,000 families which have 6 or more children and each of these families could gain £14,054 or more from the removal of the cap. Increasing welfare spending does not address the root causes underpinning welfare dependency but rather enables them.
NHS
There will be 250 new Neighbourhood Health Centres in England, with 120 due to open by 2030. These centres are to initially focus on improving access to general practice and supporting people with complex needs/ long-term conditions in deprived areas.
The Chancellor also announced a freeze to prescription charges for one year at £9.90.
Energy Bills
The Government plans to cover 75% of the domestic share of Renewable Obligations from April 2026 until 2029, cutting the average energy bill by £150.
Additionally, there will be additional funding for the Warm Homes Discount Plan with an expanded Warm Homes Discount Scheme which provides a £150 rebate on energy to support low-income and vulnerable households.
