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’s forthcoming Budget is facing intense scrutiny amid warnings that households and businesses could be hit by a series of smaller tax increases rather than one dramatic rise. For taxpayers already struggling with living costs, the prospect of additional charges, frozen tax thresholds and changes to existing reliefs has raised concerns about whether the government can repair the public finances without placing further pressure on ordinary people.
The political challenge for Labour is clear: ministers need to demonstrate that they can fund public services, manage government debt and support economic growth, while convincing voters that they are not repeatedly asking working families to shoulder the cost.
A collection of relatively modest tax changes can have a significant cumulative effect. A household might not notice one adjustment immediately, but several changes affecting income, savings, pensions, property or everyday spending could gradually reduce the money available at the end of each month.
However, the details matter. A forecast of possible tax measures is not the same as a confirmed Budget announcement, and the actual impact will depend on which proposals the Chancellor adopts, when they take effect and which taxpayers are affected.
Why Labour is turning to smaller tax increases
The government has limited its options by promising not to increase the main rates of income tax, employee National Insurance or VAT for working people. That leaves ministers looking at changes to individual allowances, reliefs, property-related taxes and the rules governing particular industries.
Julia Lopez, the Conservatives’ shadow business secretary, has argued that Labour is preparing to impose numerous smaller tax increases because it has exhausted its room for larger changes. Her comments reflect the opposition’s political argument ahead of the Budget, rather than a confirmed list of measures that the Chancellor will introduce.
The distinction matters because not every proposed change would necessarily increase the tax bill for every household. Some measures could raise money from particular industries, while others could reduce liabilities for selected groups.
Nevertheless, the combined effect deserves scrutiny. When governments change thresholds, narrow exemptions or alter the treatment of particular forms of income, the consequences can be less obvious than an increase in a headline tax rate.
For taxpayers, the practical question is simple: how much will they pay under the new arrangements, and will they receive anything in return through improved services or lower costs elsewhere?
The pensioner tax trap
One of the most sensitive issues concerns pensioners whose state pension is approaching or exceeding the personal income tax allowance.
The full new state pension is expected to rise to £13,036, while the standard personal allowance remains £12,570 under current rules. Unless the government changes the arrangements, pensioners with no other income could find that part of their state pension becomes taxable. Those with private pensions or other taxable income may already have tax liabilities.
The government is reportedly considering raising the threshold for low-income pensioners to reduce the risk of bringing them into income tax solely because their state pension increases. The details will be important: eligibility rules, treatment of other income and the duration of any protection could determine who benefits.
For pensioners, the concern is that an annual increase in their pension may not translate into an equivalent increase in disposable income if tax liabilities rise at the same time.
For the Treasury, the difficulty is finding a way to protect people on low incomes without creating a more complicated system or providing relief to households that do not need it.
The issue also demonstrates how a tax policy can have unintended consequences when allowances remain frozen while incomes increase. Even without raising the tax rate, the government can collect more revenue as more people become liable for tax or move into higher tax bands.
Businesses face another round of uncertainty
Companies are also watching the Budget closely, particularly those already dealing with higher employment costs, business rates and regulatory requirements.
Several proposals have been discussed ahead of the announcement, including changes to the bank tax surcharge and the tax treatment of business sales. The Chartered Institute of Taxation has reported speculation that the surcharge on banks’ profits above £100 million could rise from 3% to 8%. It has also highlighted possible changes to Business Asset Disposal Relief, which affects qualifying business owners selling their companies. These proposals remain subject to confirmation.
Supporters of additional taxation on banks argue that profitable financial institutions can contribute more towards public spending. Critics counter that a higher tax burden could affect lending, investment and the competitiveness of Britain’s financial sector.
For smaller businesses, the concern is often less about a single tax and more about the cumulative cost of employing staff, occupying commercial premises and complying with administrative rules.
There may also be some relief. Reports ahead of the Budget suggest that the threshold for Small Business Rates Relief in England could rise from a rateable value of £12,000 to £18,000. If adopted, this could help some smaller shops and other businesses, although eligibility and the precise funding arrangements would matter.
The government’s challenge is to ensure that measures designed to raise revenue from larger companies do not unintentionally discourage investment or create additional costs for smaller firms and their customers.
Property, inheritance and online sales under scrutiny
Property taxation is another area attracting attention.
A new annual surcharge on English homes valued at £2 million or more is due to apply from April 2028, according to reporting on the government’s existing plans. The measure is expected to affect fewer than 1% of properties, but the wider debate over property taxation has raised questions about how the tax burden is distributed between homeowners, tenants and investors.
Inheritance tax is also under scrutiny as the government prepares for changes affecting inherited pension funds from April 2027. The rules could increase liabilities for some estates, although the effect will depend on the value of the estate, available allowances and individual circumstances.
Meanwhile, the Chancellor is reportedly considering making online marketplaces responsible for collecting VAT from certain sellers using their platforms. The proposal could help the authorities collect tax from businesses selling through websites and may improve compliance where sellers operate across international borders.
These measures illustrate why the phrase “dozens of small tax rises” can be politically powerful. Tax changes can affect different groups in different ways, and the headline rate of taxation may remain unchanged even as individual liabilities increase.
But the reverse is also true: some changes could reduce bills for eligible businesses or households. The overall impact can only be assessed once the full package is published and the costs and benefits are set out.
Will the Budget damage economic growth?
The wider concern is whether repeated tax changes could weaken confidence among households and businesses.
If firms expect their costs to rise, they may delay recruitment, investment or expansion. If households anticipate higher bills, they may reduce spending and increase precautionary savings. Such decisions can affect economic activity, although the scale of any impact depends on the type of tax, the groups affected and how the revenue is spent.
At the same time, the government cannot ignore its spending commitments. Public services need funding, and higher debt-interest costs can leave less room for new initiatives. Reuters has reported that the government intends to fund its Budget measures through a combination of tax increases and spending decisions rather than relying on additional borrowing.
The Treasury must therefore weigh the economic effects of raising revenue against the consequences of failing to fund its commitments.
A well-designed tax change may improve fairness or close a loophole without significantly discouraging productive activity. A poorly designed one could create additional complexity, encourage avoidance or make investment less attractive.
That is why the details of the Budget will matter more than the number of individual measures announced.
What taxpayers should watch on Wednesday
The Chancellor is due to deliver the Budget statement in the House of Commons at approximately 12.30pm on Wednesday, October 28, 2026. The accompanying documents will set out the proposed tax changes and the government’s economic and fiscal forecasts.
Taxpayers should look beyond the headline announcements and examine the effective dates, eligibility criteria and transitional arrangements. A measure that takes effect immediately can have a different impact from one introduced gradually over several years.
Households should also distinguish between proposals that have been confirmed and measures that remain speculation. Budget rumours can help identify the issues under discussion, but they should not be treated as a definitive account of what the government will do.
For businesses, the key questions will include how changes affect employment costs, investment incentives, property expenses and the administrative burden of complying with tax rules.
For pensioners, the treatment of the state pension and personal allowance will be especially important. For homeowners and business owners, the rules governing property and inheritance may have longer-term consequences.
A Budget that will test Labour’s credibility
The accusation that Labour is “digging deeper into a hole” reflects the opposition’s view that the government is trying to solve financial problems through repeated tax changes rather than addressing the underlying pressures on spending and growth. It is a political argument, and the Budget’s eventual measures will provide the basis for judging it.
The government’s position is that public finances must remain sustainable while households and businesses receive support where it is most needed. The challenge is to demonstrate that the tax system can raise the required revenue without imposing unnecessary costs on people who work, save, invest or run businesses.
Ultimately, the question is not simply whether Wednesday’s Budget contains dozens of measures. It is whether the combined package is fair, understandable and economically sustainable.
If small changes accumulate into a significant increase in household and business liabilities, ministers will need to explain who pays more and why. If other measures offer meaningful relief, those benefits must be assessed alongside the costs.
The Budget will reveal how Labour intends to balance its promises with the financial realities facing Britain. For taxpayers, the most important outcome will be the effect on their own finances — not the political slogans used to describe the Chancellor’s decisions.