The Month That Was……November 2025

This month’s Budget from Rachel Reeves was a stark reminder of how far-reaching the aftermath of the 2022 mini-budget truly was (you remember……the 49 day Liz Truss experiment).

Since that farcical period, every Budget has had to be carefully trialled, tested and market-proofed in advance. Not because Government has suddenly discovered a love of complete transparency……but because the alternative was truly exposed by Liz Truss. Uncosted and untested announcements can send markets spiralling, damage confidence and leave long-lasting scars on the economy.

Whatever one’s politics, the legacy of the Truss Budget is clear. It fundamentally changed how future Chancellor’s approach economic policymaking. This month’s Budget was all about a Government taking no chances……briefing, signalling and reassuring well before stepping up to the dispatch box. And then for good measure, making sure any significant changes are kicked down the road to retain the status quo in the meantime.

Why?

Answer 1: The UK Government plans to borrow around £304 billion through gilt issuance (bonds to you and I) in this tax year……the second highest on record. The more untrustworthy / radical Rachel Reeves appeared in the Budget, the more the bond market would react negatively and the cost to borrow £304 billion would go up……which creates a further black hole……which creates the need for more tax rises.

Never underestimate the power of the bond market. It cost Liz Truss her job……The Trump had to loosen his hard stance in April on his Tariff whirlwind. Bond markets have licence to kill bad choices.

So all eyes were on the bond market response to the Budget……the reaction……the biggest reduction in the cost of borrowing on the bond market on Budget day for 20 years. Or to put that another way……the bond market liked it.

Answer 2: And now for the cherry on the Reeves cake……this almost certainly saved her job at a time when the backbenchers were lining up with stones to throw.  

Politics and personal gain before the greater need of the country. I was hoping for more but got what I expected. 

The Numbers

The last time there was this much speculation about which taxes will go up in a Budget was, well, last year’s Budget. To have two major tax-raising events within the first 18 months of a new Government is unprecedented and it tells us something important: Chancellor Rachel Reeves’ first Budget didn’t do the job.

So why the sense of constant crisis? It is almost entirely self-inflicted, thanks to the Chancellor’s decision to meet her crucial fiscal rules by such a narrow margin. It is like setting off on a 100 mile journey with only 102 miles worth of fuel in the tank. When the buffer against unexpected shocks is so small, every minor change in the forecasts sparks speculation about another round of tax rises to get back in the black. This is a cycle that is presently on repeat every six months.

By establishing meaningful fiscal headroom there is a clear path to ending the cycle of speculation and instability, but it will take political bravery and a clear story about the gain that will come from the pain. Policial bravery is not what this Government is about though.

Instead there was a ‘smorgasbord’ of announcements:

- Income tax thresholds have been frozen for another 3 years until 2030 / 2031, which will push more than 1 million extra people into higher rates of income tax as wages rise.

- An increase in the national living wage of 4.1% to £12.71 an hour has been confirmed. The national minimum wage rate for those aged 18 to 20 will increase by 8.5% to £10.85 an hour.

- Pension contributions made through salary sacrifice schemes above an annual £2,000 threshold will no longer be free of national insurance contributions from April 2029. The measure is expected to raise £4.7 billion in 2029 / 2030.

- An annual surcharge will be applied to homes valued at more than £2 million from April 2028. The measure is expected to raise £400 million in 2029 / 2030.

- The two-child benefit cap has been scrapped from 2026. The measure is expected to cost £2.3 billion in 2026 / 2027.

- Green levies will be removed from energy bills from next year until 2029, expected to cost about £2.3 billion.

- The amount of money that can be saved tax free each year in a Cash ISA has been cut to £12,000 from April 2027 (currently £20,000). Those aged over 65 will retain the full cash allowance.

- Tax rates on dividends, property and savings income will be increased by 2%, raising £2.1 billion by 2029 / 2030.

- Tax rates for 750,000 retail and leisure properties will reduce, set to be paid for by an increase in rates on properties worth £500,000 or more. The measures will reduce tax receipts by £1.2 billion on average each year.

- Electric vehicle drivers will be charged 3p per mile on top of other road taxes from 2028 / 2029. The average driver of a battery electric car driving 8,500 miles is therefore expected to be charged £255 a year.

- Rail fares have been frozen for a year, promising to save commuters on the more expensive routes more than £300 per year,

- Alcohol duty will rise in line with retail price inflation from February and a flat-rate excise duty of £2.20 per 10ml on all vaping liquid will come into effect from October 2026.

Elsewhere, away from the ‘fun’ of the Budget……

The Trump has decided to sue the BBC for between £1 billion and £5 billion (he hasn’t decided yet) for false editing of his speech prior to the Capitol riots. “I think I have to do it,” Trump added during his most recent interview, unwittingly using the same tone a toddler does when it corners the family dog and says firmly, “I’ve got to prod its eyes.”

86% of the licence fee we pay goes directly into funding BBC……can you imagine a scenario that we have to pay a higher licence fee to cover the cost of the compensation to The Trump!

And my favourite number of the month was……7……games in a row unbeaten and the first medal of the season for my favourite netballer!

Trump of the Month

There could only be one winner this month……Rachel Jane Reeves.

Leaking the Budget announcements before the actual speech was crazy on every level. Consider that Hugh Dalton resigned as Chancellor in 1947 after leaking just one line of his Budget to a journalist.

However, when you put your own job before the greater need and good of the country, you lose all credibility. Most of the significant changes are to come in 2 – 3 years to safeguard her political future in the meantime. 

If a Government with a majority as big as this one isn’t brave enough to try something that will drive growth with the tax system, I don’t know when we will see it. Shameful stuff.  

Which leads me on to the Peter Principle.

It is a management theory that states: in a hierarchy, every employee tends to rise to their level of incompetence. In other words, people are promoted based on success in their current role until they reach a position where their skills no longer match the job requirement and they stop advancing.

We saw it with Liz Truss. We are now seeing it with Rachel Reeves. They rose to their level of incompetence in view of us all.

Trump Lunacy Rating: 10 / 10

And Finally……

“Good followers do not become good leaders.”

Laurence J. Peter