The first Labour Budget in 14 years, conducted by Britain’s first ever female Chancellor is now behind us. I suppose we can say ‘it wasn’t as bad as it could have been’. That said, there were certainly some nasties in there to prepare us for Halloween. The devil is in the detail!
As I have said previously, I do not think she needed to raise as much money to splash on already bloated public services (without conditions or productivity offsets). The need to raise £40 billion after identifying the £22 billion black hole on taking office was rather over the top and generally self-harming. The Budget, as expected, was anti-business, which won’t help the objective of growth.
We shouldn’t be surprised. How she expects to entice business and overseas’ investors after painting such a bleak picture is hard to fathom. Rishi’s best performance to date came from the dispatch box of the opposition side – as he rightly pointed out inflation was coming down; the economy was growing, and unemployment was at a reasonable level. The books were never going to be perfect due to COVID, the Energy Crisis and Inflation etc. in short order. Tax will now be the highest level versus our economic output on record.
The big nasties I spotted:
Although a lot will breathe a sigh of relief, I am sure farmers and businesses will not. Farms that usually pass from generation to generation, who farm the land to keep food in our supermarkets, will face a huge roadblock in probate and IHT costs. This, along with the push for Green Energy – has the Government forgetting a very recent lesson. Food security and Energy security should be paramount and are as important as defence. As in the Siege of Caffa, what use is a castle without food. What must Putin think!
Businesses also face a sharp increase. A 9% cost increase in the National Insurance (NI) levy for employers to 15% and a significant reduction in NI starting levels to only £5,000 from £9,100. This will be a per employee cost to business, with the underlying employee feeling the harsh reality. Not to mention the National Living Wage increase of 6.7% to £12.21 next April. This is likely to reduce jobs rather than increase them.
My joy was in Individual Savings Account (ISA) being left well alone, not even a mention which is great. I advise all to make use of this where possible!
There were some sectors which escaped and will benefit from the budget. One was the gambling industry, no announced changes to taxes and duties. This compares to the £0.9 – £3 billion that was allegedly being considered. The building sector and those that support the key infrastructure, NHS, road, rail etc. should also benefit. The following shares are listed on the AIM market, so carry a higher degree of risk. They are worth considering in my opinion if you have the appetite:
A UK company headquartered in Edinburgh, which operates in the US, developing, licensing and offering ongoing support of computer software for the US healthcare industry. US hospitals can find it tricky to keep track of patients’ billing given all the different avenues they use to pay. Craneware simplifies this process and reduces admin. There has been a positive market response to its new Trisus platform – helped by becoming a Microsoft Global Partner Solution provider, which means Trisus will be offered on the Microsoft Azure cloud computing marketplace.
A leading intelligent transport systems provider. Reeves highlighted an increase in spending on transport with £3 billion set aside, part which will be for equipment upgrades. With Journeo technology and recently acquired Infotec – the business looks well placed to win contracts and grow organically in my opinion.
