00:00The Chancellor is preparing a budget framed by weak growth and stretched services.
00:05Independent analysts say the public finances have less room than hoped,
00:10raising the prospect of tax increases or tighter spending to meet fiscal rules.
00:15There's an old maxim, there's only two things in life you can sort of guarantee, or be certain of, death and taxes.
00:22Now, of course, the reality is that we keep hearing about the so-called black hole
00:27and sort of the problems that Rachel Reeves has and that she's going to have to somehow fill them.
00:32Now, it's a question of sort of the semantics of this.
00:34Do they call it tax or do they call it revenue?
00:37Ultimately, we're all going to pay more when it's sort of an increase to the VAT rate,
00:42which has been sort of mooted.
00:44The other rumour I'm hearing is that it's where they're going to sort of shift the burden
00:50from sort of younger people who are paying sort of extraordinary levels of taxation
00:55and put that sort of more on sort of older people.
00:58And how that will happen is that it will reduce the national insurance rate,
01:02which is paid by all working people.
01:04So that would fulfil the manifesto commitment not to raise taxes for the working people.
01:09But, of course, old age pensioners or those on sort of state pension
01:12or occupational pension, that matter, once you go above the sort of the tax threshold
01:18of which is 12,570, which is fairly low.
01:25So a lot more sort of people at that rate are paying tax.
01:28Of course, any sort of increase in sort of the rate of taxation affects them.
01:32So it will be about shifting the burden around.
01:34But, hey, you know, fuel duty, that could go up in a nutshell.
01:38It's going to become pretty painful.
01:41Well, polling from YouGov in September found the public divided.
01:45Roughly one-third prioritised avoiding cuts to services,
01:49even if that meant higher taxes or borrowing.
01:52Around three in ten preferred avoiding tax rises,
01:56even if that meant cutting spending.
01:59The optics of this is that this is a government that came in
02:01promising to make people feel better off.
02:04I don't think they're going to sort of feel much better off
02:07when there's more money coming out of their weekly sort of income,
02:11whether it be sort of through wages or pensions, contribution,
02:13or whatever they get rather from their pensions.
02:17It's not going to make people feel good.
02:19And, of course, we're talking about sort of an autumn statement,
02:21you know, the budget in effect,
02:23which is about four weeks or so before Christmas.
02:25So you're taking money out of people's pocket,
02:28although some of these tax rises may not sort of go until sort of next spring, perhaps.
02:33But psychologically, people are going to feel poorer coming up to Christmas.
02:37And, of course, what we know in the high street
02:38is that a lot of retailers are really suffering.
02:42And, of course, you know, I'm sort of seeing,
02:43even from a personal point of view,
02:44a lot more sales and offers at this point.
02:47And traditionally, of course, this is the really good period.
02:50So if it's getting tougher for them,
02:51then we can probably expect the sort of the early part of 2026
02:55to see a lot more closures of high street sort of chains.
02:59Councils warn that frontline services are under strain,
03:03with the local government association pointing out
03:06two rising budgets for adult and children's social care and homelessness.
03:12So the trade-off is clear.
03:14Protect services or hold down the overall tax take.
03:18Independent institutes argue the numbers are tight,
03:21but the balance of decisions will shape
03:24what we all experience on the ground in the year ahead.
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