Wednesday will be the first Budget of the Burnham-Healey era (Image: Zeynep Demir Aslim/ZUMA Press Wire/Shutterstock)
I spend most of my week talking to people who run businesses, and the message I hear is always the same. They want to grow. They want to take on more staff. They want to give a young graduate their first proper job. And every time, Labour make that harder. Next week’s Budget will make it harder still. We already know the shape of it, because Labour have shown us who they are. Labour raise taxes. They did it under Keir Starmer and Rachel Reeves, and they will do it under Andy Burnham and John Healey. It does not matter who is in Downing Street or who holds the red box – the instinct never changes.
The difference this time is that Labour have boxed themselves into a corner, having promised not to raise taxes on working people, then raised them anyway. They have run out of big levers they can pull without breaking yet another promise in public. So they have turned to the small ones instead.
That is what this Budget is shaping up to be. It will not bring one big tax rise you can see coming. It will bring dozens of small ones, buried in consultations, technical notes and the small print that most people never read. A new charge here, a tighter rule there, an allowance frozen somewhere else. Each one is designed to slip through unnoticed, but together they add up to a squeeze from every possible direction.
Businesses feel that squeeze first, and they feel it hardest. So many small firms don’t have an army of lawyers or a tax department, but are often led by a small team of hard-working people who already work evenings and weekends to keep the doors open. Every new form, every new deadline and every new charge comes out of that person’s time and that person’s margin.
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Julia Lopez says businesses want to be part of solution to Britain’s challenges (Image: Jonathan Buckmaster)
Labour need the money because they have dug themselves a hole and refuse to stop digging. The welfare bill keeps climbing, with more people are signed off work. Deep down Labour know this cannot go on, but they will not take the hard decisions to fix it. So instead of getting welfare under control, they go back to the same place they always go. They go back to the people who work, and to the businesses that employ them.
On top of every new charge, Labour have piled a mountain of employment red tape. Their Employment Rights Act makes it riskier and more expensive to take someone on. Business owners tell me plainly that they now think twice before hiring. Many of them are not hiring at all. The people who lose out the most are are the young people looking for their first job, the graduates sending out application after application. So many businesses I speak to want to be part of the solution. They want to train people, invest and grow. But you cannot ask firms to create jobs if we continue to tax them harder each year and bury them in rules. That is what Labour are doing.
The Conservatives would take a different path. We would repeal the job-destroying measures in Labour’s Employment Rights Act, so that hiring stops being a gamble. We would halve employer National Insurance for under-25s, so that it is cheaper and easier for a business to give a young person their first start. And we would get the welfare bill under control, so that the people who work are no longer asked to pay for those who could work but do not.
That is the choice. Labour will carry on raiding businesses and working people, one sneaky tax at a time, because they cannot bring themselves to say no to more spending. We would back the people who build businesses, create jobs and keep this country running. John Healey has one chance next week to change course. He should cut taxes on the businesses that create jobs, scrap the red tape that stops them hiring and finally face up to the welfare bill. Sadly, nothing Labour have done so far suggests he will.
Wednesday’s Budget Will Bring Dozens of Small Tax Rises as Labour Digs Deeper Into Hole
Britain is preparing for a closely watched Budget as Chancellor John Healey faces mounting pressure to balance the public finances, support struggling households and restore confidence among businesses. Yet with the government having promised not to increase the main rates of income tax, employee National Insurance or VAT, attention has increasingly turned towards smaller tax changes, tighter reliefs and new charges that could affect different groups across the economy.
The controversy has intensified after Conservative Shadow Business Secretary Julia Lopez warned that Wednesday’s Budget could introduce numerous smaller tax increases rather than one dramatic announcement. Her argument is that individual measures might appear limited, but their combined effect could place additional pressure on businesses, workers and families.
Labour faces a difficult balancing act. Government borrowing costs remain high, public services require funding and ministers want to provide some relief from rising household expenses. At the same time, businesses are demanding greater certainty about future tax liabilities and the costs of employing staff.
The question is whether Healey can raise the money the Treasury needs without undermining investment, employment and the government’s wider economic ambitions.
Why the Chancellor Is Under Pressure
Healey’s first Budget under Prime Minister Andy Burnham comes at a challenging time for the British economy.
The government must account for the cost of public services, defence commitments, infrastructure investment and support for households facing higher energy bills. It must also demonstrate to financial markets that its spending and taxation plans are sustainable.
The difficulty is that the government has limited room to manoeuvre. Labour previously promised not to increase the main rates of income tax, employee National Insurance and VAT. Those commitments restrict the Chancellor’s options if he decides that additional revenue is necessary.
Consequently, attention has shifted towards taxes affecting particular industries, changes to allowances and reliefs, and measures intended to improve the collection of money already owed to HMRC.
Reuters reported on October 26 that a levy on banks was expected to be a principal revenue-raising measure, potentially helping fund temporary support for households. Other measures under discussion include a crackdown on tax liabilities involving online marketplaces and possible changes affecting family businesses. <Cite refs={[“turn848741search1″,”turn848741search4”]}/>
However, the precise package will not be clear until the Budget is delivered and the accompanying documents are published.
The ‘Small Tax Rises’ Controversy
Lopez argues that Labour could resort to a series of relatively narrow tax increases because the government is reluctant to break its promises on the largest sources of tax revenue.
Her criticism focuses on the cumulative effect of policy changes. A new levy, a reduced allowance or a tighter eligibility rule may affect only a particular group, but several changes introduced together could increase costs for businesses and taxpayers.
For small companies, the concern is not limited to the amount of tax payable. Owners must also account for additional paperwork, professional advice and the time required to understand new regulations.
A business operating with narrow profit margins may find that several modest increases have a greater impact than expected. Employers could respond by delaying expansion, reducing discretionary spending or reconsidering recruitment plans.
Nevertheless, the consequences will depend on the measures actually introduced. Some tax changes may affect only larger companies or higher-income households, while others could have wider effects through prices, wages or investment.
It is therefore important to distinguish the Conservative opposition’s warning from confirmed Budget policy. The claim that Labour intends to introduce dozens of hidden tax increases is a political interpretation of the anticipated package, not a complete list of measures already announced.
Banks in the Treasury’s Sights
The banking sector is among the industries expected to face changes.
One option reported before the Budget is an increase in the corporation tax surcharge paid by banks. The surcharge was reduced from 8% to 3% under the previous Conservative government, and restoring some or all of the previous rate has been discussed as a way to generate additional revenue.
Supporters of a higher levy argue that banks have reported substantial profits and that the sector can contribute more towards public finances. They also contend that targeted taxation could raise money without increasing the main tax rates paid directly by employees.
Banks and their industry representatives have raised concerns about the potential consequences. They argue that additional taxes could affect investment, lending decisions and the UK’s attractiveness as a financial centre.
There is also a question about whether the cost would remain with shareholders or be partly passed on to customers through higher fees or borrowing costs. The eventual effect would depend on how banks responded and the structure of any new measure.
Healey must therefore weigh the potential revenue against the risk of unintended consequences. A higher tax on banks could provide funds for public spending, but the government would need to consider its broader effects on the financial system.
Online Marketplaces Could Face Tougher Rules
Another reported proposal concerns online marketplaces such as Amazon, eBay and Temu.
According to pre-Budget reporting, the government is considering making platforms responsible for collecting VAT owed by certain retailers selling through their services. The proposal could target business sellers above a specified turnover threshold and is intended to improve compliance.
Supporters argue that the change could help create a more consistent tax system for businesses selling goods online. Traditional retailers have frequently complained that they face costs and obligations that some online competitors may avoid.
If the new system is implemented effectively, it could improve tax collection and reduce opportunities for non-compliance.
However, marketplace operators and sellers could face additional administrative requirements. Smaller businesses may need to adapt their accounting systems, while platforms would need to ensure that the correct taxes are collected and reported.
There are also questions about whether any additional costs could eventually be reflected in prices paid by consumers.
The final details will matter. The threshold, exemptions, enforcement arrangements and treatment of different sellers will determine which businesses are affected and how significant the changes prove to be.
Family Businesses and Entrepreneurs Face Uncertainty
The tax treatment of family businesses is another area attracting attention before the Budget.
Reports suggest Healey may consider changes to the treatment of businesses transferred to the next generation. Depending on the structure of the proposal, some transfers could face a different tax burden than under existing arrangements.
The government may argue that changes are needed to ensure that people with similar levels of income or gains are treated fairly. Additional revenue could also help support public spending.
But family-business owners warn that a substantial increase in the tax payable when a business changes hands could complicate succession planning. Some businesses could face difficult decisions about whether to sell, restructure or transfer ownership gradually.
The concern is particularly relevant to companies whose value is tied up in property, equipment or long-term investments rather than cash reserves. A tax liability arising during a transfer could create financial pressure even when the business itself remains viable.
Any reform would need to consider the distinction between preventing tax avoidance and discouraging genuine business succession.
The Chancellor may also consider incentives for entrepreneurs who reinvest the proceeds of selling a business in the UK. Such measures could help balance revenue-raising changes with support for investment, although their effectiveness would depend on the eligibility rules and the behaviour they encourage.
Pensioners Could Also Face Difficult Decisions
The Budget comes amid wider concerns about pensioners’ tax liabilities.
The full state pension is expected to rise above the frozen personal income tax allowance of £12,570. Without a corresponding change to the allowance or another protective measure, some pensioners whose income consists largely of the state pension could become liable for income tax.
That creates a political difficulty for Labour, which has promised to protect pensioners while also needing to raise revenue.
Pre-Budget reporting has suggested the government could adjust the treatment of lower-income pensioners to reduce the risk of small state pension increases resulting in unexpected tax liabilities. However, the final approach must be confirmed by the Chancellor.
The issue illustrates how tax policy can have consequences beyond headline rates. Freezing a threshold while income rises can increase the number of people paying tax without an explicit increase in the tax rate itself.
For pensioners living on limited incomes, even a relatively small additional liability can matter. Clear guidance will be essential to help people understand whether they are affected and what action, if any, they need to take.
Will Households Receive Any Relief?
Although the Budget is expected to include revenue-raising measures, the government is also under pressure to reduce the cost of living.
Reports before Wednesday’s announcement suggest that targeted help with winter energy bills could form part of the package. One option is additional support for lower-income households through the Warm Home Discount, while the government has also been examining changes intended to reduce electricity costs.
The Chancellor has to decide how much assistance can be provided without undermining the government’s fiscal objectives.
Targeted support may help households most exposed to energy costs, but it will not necessarily benefit every family facing financial pressure. Some people just above eligibility thresholds may continue to struggle, while others may face higher costs through taxation or changes to public services.
The government will need to explain who qualifies, how much support will be available and how long it will last.
Businesses will also look for measures that lower operating costs or simplify regulations. If the Budget combines tax increases with targeted assistance, its overall effect will depend on which groups pay more and which receive support.
The Wider Argument Over Labour’s Economic Strategy
The disagreement over Wednesday’s Budget reflects a deeper dispute about how Britain should manage its economy.
The Conservatives argue that higher taxes and additional regulation can discourage companies from investing and employing more people. They contend that controlling spending and reducing the cost of hiring would offer a more sustainable route to economic growth.
Labour argues that the government must fund essential public services, meet defence commitments and support people affected by the cost of living. Ministers also maintain that better tax compliance and targeted changes can raise revenue without breaking their principal tax-rate promises.
Neither approach removes the underlying trade-offs. Tax reductions can leave less money available for public services unless they are offset by spending cuts or stronger growth. Tax increases can provide additional revenue but may affect investment, consumer prices or business decisions.
The key question is whether the measures chosen by the Chancellor achieve their stated objectives at an acceptable cost.
For businesses, predictability is particularly important. Companies need to know what their future tax liabilities will be before making long-term decisions about hiring, investment and expansion. Frequent changes or unclear rules can make planning more difficult.
For households, transparency matters just as much. People need to understand how tax thresholds, benefits and targeted support will affect their disposable income.
Wednesday’s Budget Will Provide the Answers
The Chancellor’s statement on October 28 will reveal which proposals have been adopted and which remain under consideration.
The accompanying Treasury documents and the independent Office for Budget Responsibility’s economic and fiscal forecasts will be important for assessing the package. They should provide details of the expected revenue from individual measures, the government’s spending plans and the outlook for public finances.
The headline tax rate is only one part of the picture. Changes to allowances, reliefs, thresholds and compliance rules can also affect the amount paid by different groups.
That is why the Budget must be examined in detail rather than judged solely by its most prominent announcement.
If the government introduces a range of targeted tax changes, ministers will need to explain why each is necessary, who will be affected and how the revenue will be used. They will also need to address concerns about investment and the costs faced by small businesses.
The opposition, meanwhile, will have an opportunity to challenge the government’s assumptions and present alternatives for raising revenue, controlling spending and supporting growth.
Conclusion: A Difficult Balance Between Revenue and Growth
Wednesday’s Budget is shaping up to be a significant test of Labour’s economic strategy.
Healey must raise enough revenue to support public services and maintain fiscal credibility while honouring the government’s commitments on the main rates of income tax, National Insurance and VAT. That combination has encouraged speculation about a series of narrower tax changes affecting banks, online marketplaces, family businesses and other groups.
Julia Lopez has warned that the cumulative effect could place additional pressure on employers and taxpayers. The government will have to answer that criticism with clear figures and an explanation of how the proposed measures fit into its broader plans.
Ultimately, the success of the Budget will depend on more than the number of tax increases it contains. It will depend on how much revenue the measures generate, who bears the cost, whether vulnerable households receive meaningful assistance and whether businesses retain the confidence to invest and create jobs.
For now, the details remain uncertain. Wednesday’s announcement will determine whether the Chancellor chooses a narrow package of targeted changes, a broader tax adjustment or a combination of revenue-raising measures and cost-of-living support.
Until the full plans are published, claims about dozens of small tax rises should be treated as political warnings rather than a confirmed account of the final Budget.