JEFF PRESTRIDGE: Burnham’s first Budget will be horrific: You MUST protect your wealth – here’s how
The Prime Minister is on the road this month, travelling the length and breadth of the UK in an attempt to reconnect his Labour government with the disillusioned British public. Fat chance there.
This heavily choreographed roadshow follows measures from Andy Burnham designed to trick us all into thinking he is firmly on our side as we battle a cost of living crisis that refuses to go away – and will worsen as the year progresses and we move into 2027.
But don’t be fooled. Burnham ain’t on your side and is only interested in taxing you to the hilt in order to fund the country’s bloated welfare bill. ‘Spend, baby, spend.’ Although I don’t want to sound like a latter day Victor Meldrew, the Budget (October 28) is not going to be pleasant for the strivers – the majority – of us.
In terms of horribleness, it will be on a par with the two damaging Budgets overseen by Rachel from Accounts.
Andy Burnham may present himself as a charming man of the people, but that certainly won’t be enough to fix Britain’s cost of living crisis
Of course, on one hand, it’s good to see Burnham get off his proverbial backside and meet the people. It’s something his predecessor was hopeless at. The new Prime Minister has a bit of the charisma Tony Blair had when Labour marched into power in 1997.
On the other, buckets of charm and presenting himself as a man of the people will only get him – and the country – so far.
It will not fix the cost of living crisis with inflation currently sitting at 2.6 per cent – and forecast to rise to 4.3 per cent in the first quarter of next year. According to investing platform AJ Bell, inflation has driven up prices by 28 per cent over the past five years.
Nor will a simpering Burnham reignite an economy that grew by a paltry 0.4 per cent in the second quarter of this year and is now forecast to grow next year by an anaemic 0.3 per cent. To put this figure into perspective, it compares with the previous 1.6 per cent growth forecast from the Office for Budget Responsibility.
You don’t need to be an economist to realise the economy is stuck in a rut, strangled by rules and regulations (many introduced by Labour) that are anti-business and anti-growth.
The economy will only grow if businesses are liberated from the yoke put around their necks by this Government, writes Jeff Prestridge. (Pictured: Burnham visiting a farm in Cornwall)
Chancellor John Healey talks of driving ‘growth in every postcode’, but it is likely that energy bills will remain high and more tax rises will come our way, our money editor warns
Talk of driving ‘growth in every postcode’ – Chancellor John Healey’s response last Thursday to the disappointing second quarter growth figures – is no more than the soundbite of a fantasist.
The economy will only grow if businesses are liberated from the yoke put around their necks by this Government – and consumers see less of their hard earned income and savings disappear in pernicious taxes. None of the measures that Burnham has announced so far to tackle the cost of living will significantly ease pressure on household budgets.
The announcements – including a lower cap on single bus fares in England from next year and a temporary suspension of VAT on electricity bills from October – are more headline-grabbing than meaningful.
Some, such as a possible clampdown on ‘misleading’ supermarket discounts, defy logic. This country’s supermarkets are super competitive and don’t need Labour telling them how they should run their businesses.
Maybe the meaningful stuff is being kept back for Healey’s inaugural Budget, but I doubt it. This Government is too boxed in by ideology to do what is necessary to tackle the cost of living crisis head on and get the economy growing.
As a result, energy bills will remain prohibitively high for both businesses and households – while companies will continue to shed workers rather than invest in the UK economy. As for the Government’s failure – or unwillingness – to get a grip on welfare spending, it will continue to spook financial markets and keep borrowing costs high, much to the dismay of many homeowners.
All this leads me to one conclusion which won’t make for easy reading (maybe it’s time to take a break and grab a wee whisky before you read on).
Yet more tax rises are coming our way, especially if you are a high earner or have investment wealth sitting outside the tax shield of an Isa or pension. It’s time to see if you can protect your household’s wealth before Healey hits your finances for six.
So, I urge you to use your Isa and pension allowances – and transfer assets between family members so that collective taxes are kept to a minimum.
It’s an issue myself and my colleagues on Wealth & Personal Finance will be returning to between now and October 28. Unlike Labour, we bat for YOU.
