Instinctif's
Verity Barton
hosts a panel of political and economic experts to analyse Rachel Reeves' historic first Labour Budget - the party's first since 2009. With insights from JohnHowarth
(former Labour MEP), Tom Harris
(former Labour Minister), and Rob Thomas
(former Bank of England economist), the discussion unpacks the implications for British business and the economy.
- Tax and Spending Balance: A ￡40 billion tax increase, primarily through employer National Insurance contributions and non-dom changes, aimed at funding NHS and education investment whilst maintaining market confidence.
- Political vs Economic Event: The Budget serves as both a political statement to Labour MPs and a signal to markets about fiscal responsibility, with the Government carefully balancing manifesto commitments against economic stability.
- Market Response: Markets have responded positively to the investment-focused approach, viewing the Budget as maintaining fiscal discipline whilst avoiding significant attacks on capital.
- Business Impact: Whilst businesses face increased costs through employer NI contributions, the Budget's approach to capital taxation has been more moderate than anticipated, providing some relief to the business community.
- Public Investment Strategy: New investment rules recognise the value of public investment, particularly in health and housing, creating opportunities for business engagement in delivery.
- Industrial Strategy: Labour's embrace of industrial strategy, particularly for future industries like electric vehicles, signals potential support for key growth sectors despite increased tax burden.
- Business Engagement Opportunities: Significant scope for business input on business rates reform, NHS delivery, and housing targets over the next 12-18 months.
- Economic Stability Focus: The Government's priority on economic stability and clear public finances aims to provide businesses with certainty on future tax rates and employment costs.
