It’s only three months since the Labour government came into power and, despite a whopping majority, the goodwill gloss is already wearing thin.
Amid squabbles over freebies, political donations and civil servant pay, consumer confidence has been dented by the scrapping of winter fuel payments, and fears that the upcoming budget will see new Chancellor Rachel Reeves balance the books/end austerity through a massive tax grab and a rewriting of fiscal rules.
Capital Gains Tax, National Insurance, Inheritance Tax, pensions… there are very few sacred cows Reeves is reportedly unwilling to slay in what she warned this week would be a “difficult” budget. And in an act of quiet desperation, BrewDog founder James Watt took to Twitter/X, with an ‘open letter’ imploring our new political masters neither to borrow more nor to raise taxes, at least not on capital gains – though an IPO looks premature given BrewDog is still losing money.
It’s not just new tax hikes that are prompting anxiety ahead of the budget. The wine lobby has grown increasingly vociferous in recent weeks over the ex-Tory government’s plans to introduce 30 new abv-based tax bands for wine – legislation so absurdly complex even EU bureaucrats would baulk.
The NFU has also quickly lost patience with the government over the ‘policy paralysis’ at Defra/the Treasury.
Meanwhile, supermarkets are hoping for business rates cuts. It seems a vain hope, with the Chancellor so obviously in tax-raising, not tax-cutting, mode – and all the more so as the proposals are at the expense of smaller shops.
There’s also growing concern over the reach of the new Employment Rights Bill for retailers and suppliers. In her charm offensive before the election, Reeves vowed this would be the UK’s most pro-business government ever. And there was acceptance among leaders that changes to employee rights was a price worth paying for stability, a watchword Keir Starmer stressed again at this week’s Investment Summit. After the colourful but chaotic Tory circus we welcomed the prospect of grey, but as reality dawns the mood is turning black.
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