An immediate focus on generating economic growth - Davies Tracey - Accountants in Tees Valley
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An immediate focus on generating economic growth

The General Election is now behind us and, as widely publicised, in Rachel Reeves we now have our first lady Chancellor of the Exchequer.

As I write this article, we are at day five of the Labour government and the day after Reeves asked the Treasury to report back to her with their assessment of the current state of the economy and public finances or, as Reeves put it when addressing an audience at the Treasury, “the financial mess left by the Conservatives”.

Reeves was also quick to say that her immediate focus was on generating economic growth.

We have been here before, of course, and most recently we have had, via former Chancellor Jeremy Hunt, “An Autumn Statement for growth” in November 2023 and which morphed into “A Budget for long term growth” in March this year.

The immediate soundbites have concentrated on home building and the planning process and infrastructure projects, including onshore wind farms in England.

What we want to hear, of course, are her plans for taxation as part of her review of the country’s finances.

In the run up to the election, the imposing of VAT on private school fees kept on cropping up as did an extended windfall tax on energy companies but what was also forthcoming from Reeves was a ruling out of increases in income tax and national insurance.

At the moment, of course, Reeves has inherited Hunt’s extension of frozen tax allowances and thresholds through to April 2028, two years after the intended timescale.

Where does that leave us as we head into Budget territory?

Well, pretty much the same debates and rumours that have marked recent Statements and Budgets such as the abolition of or changes to Inheritance Tax; increases in Capital Gains Tax rates or the introduction of a hybrid rate; revisiting recent pension scheme changes; an increase in the standard rate of VAT and the scrapping of VAT on power and labour’s take on the non-dom rules.

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