When is the Budget 2025? Date for autumn statement as Rachel Reeves and Labour need to find £30bn revenue a year by the end of this administration
There are only a matter of weeks before Rachel Reeves will unveil the next phase of Labour’s economic plans.
The Chancellor will take the battered red briefcase to the House of Commons on Thursday, November 26. Some commentators have outlined the difficult task ahead of her, estimating that the government needs to find an extra £30bn revenue a year by the end of this parliament to meet its target that the stock of public debt must by then fall as a proportion of national output.
This morning Reeves said the Budget would be focused on “getting inflation falling” and “creating the conditions for interest rate cuts”.
In a speech from Downing Street, Ms Reeves said: “The choices I make in this Budget, this month, will be focused on getting inflation falling and creating the conditions for interest rate cuts to support economic growth and improve the cost of living.”
Ms Reeves added: “The truth is that previous governments have not adequately faced up to these challenges. Too often, political convenience has been prioritised over economic imperative. The decision to pursue a policy of austerity after the financial crisis dealt a hammer blow to our economy, gutting our public services and severing the flows of investment that would have put our country on a path to recovery.
“The years that followed were characterised by instability and indecision, with crucial capital investment continually sacrificed, and hard decisions put off again and again. And then a rushed and ill-conceived Brexit that brought further disruption as businesses trying to trade were faced with extra costs and extra paperwork.”
She had some good news last month, though, as the Office for National Statistics has revealed that inflation remained steady at 3.8 per cent in September, the same as in July and August, when it was expected to head back up to four per cent. And food prices have dropped in real terms for the first time since May.
But, given that Keir Starmer’s administration was clear at the outset that it would not raise taxes. Last year’s manifesto said quite baldly: “Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.”
It surely cannot dare to U-turn on that black-and-white promise as it would be a field day for all and every political opponent. So it must be looking at alternative revenue sources. The outdated and clunky council tax system could be one, as could tax-free Isas - there could be restrictions brought in on how much can be saved tax free.
And the other area which could be ripe for government revenue creation could be the companies making the most money at the moment. Tech firms have long been targeted - but are adept at structuring their business to avoid paying local tax - but gambling firms have so far escaped much of the tax burden, despite their recent explosion. You only have to look at Premier League shirt sponsors or the adverts in any television commercial break to see how online gambling has permeated society.
In a coded warning that there may be bitter medicine to take next month - and also in a bid to head off speculation like that outlined above - Reeves yesterday said the November 26 Budget will detail her “plans based on the world as it is, not necessarily the world as I might like it to be” as global volatility and a hike in defence spending “puts pressure on our economy”.
Asked about her promise not to deliver another tax-raising statement, the Chancellor told reporters at a regional investment summit in Birmingham: “We’re still awaiting the final forecast from the Office for Budget Responsibility and I’ll set out the Budget next month.
“There’s a lot of people who claim to know what is going to be in that Budget and what the numbers will say. They don’t. It’s my Budget and they are my choices. And, frankly, some of the speculation is both ridiculous and in some cases damaging, because it’s encouraging people to make decisions that are not the right ones, based on speculation rather than facts.
“I think everybody recognises that the inheritance that we faced from the last government in terms of the state of the public finances, but also the state of our public services, required a budget last year to put both our public finances and our public services – particularly the NHS – back on a firm footing. We did that last year.
“Anyone who reads one of your papers or listens to your radio stations will know that this year has been particularly volatile in terms of world events, from Ukraine to the Middle East, to the higher trade tariffs that countries around the world including the UK face. We’re not immune to that, despite the fact that we’re doing trade deals with the EU, India and with the US.
“Of course, that puts pressure on our economy, as does the increased defence spending to keep us safe in an uncertain world. I’ll set out all my plans based on the world as it is, not necessarily the world as I might like it to be, in the Budget on November 26.”