Brian Jukes’ 2024 Budget Commentary

Those of you that follow my Budget commentaries will be aware that I like to focus on the emotions I’m feeling whilst watching the Chancellor of the day deliver their performance.  What were those emotions today?  One word: irritation!

I don’t know whether I’ve officially reached the age where it’s customary to evolve into a grumpy old man or whether I had good reason to be irritated – I hope more the latter, although my wife might say otherwise – but I found myself shouting at the TV screen, something that is really out of character (or at least that’s what I like to think!).

What was it that irritated me so much?  It was the combination of the embarrassing display of childish behaviour that masquerades as political debate in the House of Commons, together with the supercilious delivery of a Budget speech packed with blatant bending of the truth for political gain.  Consequently, a statement relatively light on tax content dragged on for over an hour.

All Chancellors love their statistics and Jeremy Hunt is certainly no exception – this is where he excels at pulling the wool over our eyes, or should I say ears?  There were perhaps no outright lies, although the jury’s out on that one until closer analysis can be performed (he has form here), but a very clever and deliberate selection of statistics designed to present almost a polar opposite view of the state of the UK economy compared to the reality.

Here are just a few of the misleading statements the Chancellor slipped into his mammoth speech:

  • Latest figures from the OBR show inflation falling to below 2% in just a few months – nearly a year earlier than forecast.  That’s only if you look at the November 2023 forecast – previous Budget forecasts had inflation coming down much sooner.
  • Since 2010 growth in the UK has been higher than in every other major European economy.  That’s because we had a very low baseline to spring from.  We’re still behind those major European economies on GDP per capita.
  • Since 2010 unemployment has halved.  That’s because there are not enough economically active people in the country to fill all of the jobs.  There are still 900,000 vacant roles within the UK, which has a profound impact on holding back the economy.  Granted, the Chancellor did acknowledge this later in his speech.
  • Government debt is falling in every year to just 94.3% by 2028-29.  Not true – debt will be increasing in every one of those years to 2028-29, although it is predicted that debt as a percentage of GDP will finally start to fall in percentage terms in 2028-29.  Of course, it is also predicted that GDP will grow in the intervening years, so this measure of debt is very misleading.  Jeremy Hunt is certainly not the first to use this ploy, but he seems to have made a dark art of it.

There were some points of interest for tax advisers in the Budget, not least the removal of the non-dom rules and the abolishment of the furnished holiday letting rules.  These will no doubt cause much scratching of heads in the coming few years and I would have to agree that these changes were needed.

Also welcome was the long-overdue announcement of a fairer approach to the levying of the high income child benefit charge.  That has been the cause of much consternation and wasted court time in recent years, not to mention potentially holding people back from taking on more hours or higher paid roles.  You can find more information on that, and various other tax measures in further Dafferns Budget blogs on our website.

To end on a positive note, I was very pleased to see buried in the Budget publications a consultation document titled ‘Raising standards in the tax advice market’.  This is a discussion aimed at formulating a plan to regulate the tax advisory services market in order to protect the public revenue and to ensure UK taxpayers can feel confident they are accessing quality tax advice.

You might think that should already be a given, but the UK is one of the few places in the world where unqualified, unregulated individuals can hold themselves out to be capable of advising on complex tax regulations.  This leads to abuse of the tax system, taxpayers unwittingly getting into hot water with HMRC and unscrupulous individuals profiting from poor quality or sometimes illegal advice.  I know I’m biased, but how can this be allowed to go on in a so-called advanced democracy?!  About time is what I say!