Labour’s Budget might give the country a sugar rush of growth but soon we’ll all end up paying more – and here’s why
Date: 2024-10-31
ONCE the noise has died down, what people really need to know from a Budget is how it affects them.
No one was expecting this one to be a champagne-popping affair with bags of giveaways.
Reeves’ Budget will deliver a brief sugar-rush of growth in the next year[/caption]
Due to the Chancellor’s stamp duty changes, more than nine in ten homes sold from March will incur duty, including for first-time buyers[/caption]
You might argue, “Great, at least it’s not coming from my pay packet.†Except, it will in the future.
Yesterday, the Institute for Fiscal Studies slammed the Chancellor for this falsehood, saying: “The continued pretence that these changes will not affect working people risks further undermining trust.â€
The Budget watchdog has already said 76 per cent of the cost of employers footing the bill will actually feed into lower real wages.
This means it will be harder to ask for pay rises or get a job in the first place — because it will become unbearably expensive for some businesses to take or keep staff on.
And this is on top of Labour’s workers’ rights reforms, which the Government’s own documents say add £5billion to the cost of business.
There is good news if you are one of the three million workers on minimum wage.
The Chancellor confirmed a 6.7 per cent pay rise, from £11.44 an hour to £12.21, from April.
Those on state benefits will also get a boost with Universal Credit rising by 1.7 per cent next April.
This will work out as an extra £1.50 a week from £90.55, and couples will get £2.50 extra a week from the current level of £145.13.
The amount of debt repayments that can be taken from a household’s Universal Credit payment each month has been reduced from 25 per cent to 15 per cent, which the Government claims will put £420 a year more in the pockets of claimants.
However, what of the rest of the 27million workers in Britain?
The cost of hiring a staff member over 21 has become, on average, £2,500 more expensive overnight, according to analysis by UK Hospitality.
This will lead to companies making tough choices on growing, hiring and investing.
The biggest issue with the Budget is Reeves’ verbal gymnastics over National Insurance contributions
Those hated self-scanning tills will become more commonplace because they will be significantly cheaper than human workers.
The one upshot for ambitious workers is that the Chancellor has removed the freeze on income tax thresholds, which automatically nudge people into a higher rate of tax.
But you will have to wait until 2029 for the benefit — conveniently just before the election year.
It’s enough to make you reach for a stiff drink.
Except an increase in duty on spirits has just made that more expensive too.