Andrew Neil: November Budget could deepen tax burden for pensioners and small businesses

A Daily Mail column by Andrew Neil argues that the forthcoming November Budget is likely to deepen the tax burden on pensioners, landlords and small businesses while taxing what it calls life’s little pleasures. Neil writes that the government is scrambling to find an extra £20 billion to £30 billion in taxes on top of a burden that he says is already the highest in more than 70 years. Reeves had insisted days earlier that there would not be further tax increases, telling the nation, 'We are not going to be coming back with more tax increases,' after Labour’s pledge not to raise taxes in its first Budget last October.

Neil highlights a plan advanced by the Resolution Foundation, a left-leaning think tank, that would amount to a £30 billion package of tax rises. Its centrepiece is a two-point increase in the basic rate of income tax to 22%, offset by a two-point cut in employee National Insurance contributions. Even with that NIC offset, the overall tax take would rise by about £6 billion a year because more people pay income tax than NICs. The Foundation also proposes freezing income tax thresholds for another two years, which would raise roughly £7.5 billion annually by pushing more taxpayers into the 20% bracket. The column argues this would mostly affect pensioners, many of whom are already at the edge of or within the 20% band due to threshold freezes.

Beyond the income tax changes, the Foundation’s plan would hit small businesses with about £6.5 billion in additional taxes, add £3.5 billion in levies on sugar and salt, and raise roughly £4 billion from higher taxes on flights, shipping and electric vehicles. Neil portrays the proposals as a 'tax jihad' that would hammer households and firms at a moment when growth is fragile and inflation remains elevated. He argues the policies would slow growth and entrench inflation, leaving the economy poorer.

Neil then places the debate in an international context, citing the Organisation for Economic Cooperation and Development (OECD). The OECD this week warned that UK inflation remains stubbornly high while growth falters. It nudged its growth forecast for this year to about 1.4% and projected roughly 1% next year. Inflation is expected to average about 3.5% this year, with risks that it could be higher—around 4%—in the near term, driven by mounting food price pressures and high energy costs. The OECD’s outlook underpins Neil’s argument that broader tax rises now could hinder a recovering economy.

The column notes that Reeves faces a sizable fiscal challenge and that, in Neil’s view, there is little appetite in the public sector for significant spending cuts. He points to productivity gaps in the public sector, with productivity in the NHS described as about 20% lower than pre-pandemic levels and overall public-sector productivity down about 5% since 2019. Neil also cites rising regulatory costs—such as compliance costs in the UK financial sector now totaling roughly £40 billion a year, up about 40% in five years—and a growth in human resources roles, which he ties to increased regulation. He argues that a decisive productivity push would save billions but would require challenging unions and other vested interests, a political hurdle he says is not being met. He concludes that, in some form, the Resolution Foundation’s proposals will influence the November Budget, and that the public will be poorer as a result.

The article reflects a broader concern about balancing fiscal consolidation with growth, particularly as lawmakers weigh higher taxes against the need to fund public services. While the specific policy details are contested, the timing—just weeks before the Budget—means businesses, pensioners and landlords are watching closely for signals about the tax and regulatory environment that will shape investment decisions and household living costs in the coming year.