TAXING TIMES AS UK’S LABOUR GOVERNMENT PREPARES BUDGET

By Staff Writer

With the annual UK political parties conference season winding down, the focus is now shifting to the next big event on the political calendar, the yearly autumn budget statement.

Budget Day has been set for Wednesday, November 26th.

The ruling Labour Party, just one year into office, is already tracking low in the polls largely due to crises in illegal immigration, cost of living and the broader economy, and internal tensions.

But it’s the management of the economy and how to turn around the ‘deep fiscal hole’ the government says it inherited that’s currently commanding the bulk of attention. From opposition attacks on its stewardship thus far, floods of analyses from economists and other experts, and business and public unease over what’s likely to unfold, budget fever has gripped the country.

Chancellor of the Exchequer Rachel Reeves, who kept her post in a recent sweeping Cabinet reshuffle by Prime Minister Sir Keir Starmer, has been under severe scrutiny and criticism from her political opponents especially, over her handling of the nation’s finances.

The former Bank of England economist has repeatedly claimed that she inherited a broken economy from the Conservative Party which had been in power for the past 14 years.

The government says there’s a £20–30bn gap in the public finances which it wants to close without cutting public spending or by additional borrowing.

In a recent report, the International Monetary Fund(IMF) noted that the UK is showing signs that an economic recovery is underway but said it “faces headwinds from global uncertainty and inflation pressures”, although those were expected to lessen in this quarter.

While the government has been tight-lipped about specifics, policies around taxation have been a main topic of speculation.

The Chancellor has hinted at a wealth tax on high earners and those with considerable assets. An aggressive approach to collecting outstanding standing taxes and tackling massive fraud in contracts handed out during the COVID pandemic are known to be on the agenda.

Analysts have still not ruled out tax rises, possibly in 2026, on capital gains, inheritance and property taxes. There are reports of some business owners weighing their options to relocate to other countries where they feel the tax burden is less onerous.

According to some experts, this year’s budget is “shaping up to be one of the most politically charged in years”.