I joined Mike Graham again this week on The Mike Graham Show to discuss Chancellor John Healey’s latest Budget and what it really means for households across Britain.
The Government is promising help with energy bills, but frozen tax thresholds mean millions of workers face paying more tax as their wages rise. We also discussed Britain’s borrowing, the growing cost of social care and whether politicians are tackling the real problems facing the country.
💷 The Tax Trap Nobody Is Talking About
One of the most important figures buried in the Budget was the additional £17.4 billion in annual income tax and National Insurance the Treasury is forecast to collect by 2030–31 compared with earlier projections.
The problem is fiscal drag. Income tax thresholds remain frozen while wages rise with inflation.
I explained to Mike how someone earning £49,000 could receive a 4% pay rise but see their take-home pay increase by only 3.4%.
Meanwhile, their income tax and National Insurance deductions rise by 6.3%.
Your employer gives you a pay rise, but the Treasury takes an increasing share.
I’ve broken down the full calculations and Budget figures in Wednesday’s Stat of the Nation.
[EMBED WEDNESDAY’S BUDGET ARTICLE HERE]
⚡ £100 Off Your Bills — Is That Really Enough?
The Chancellor announced a £100 energy payment for eligible households in England living in council tax bands A to D.
But as Mike and I discussed, £100 doesn’t go particularly far when energy bills and other household costs have risen so substantially.
The bigger question is why Britain remains so exposed to international energy shocks.
Successive governments have closed domestic energy infrastructure while pursuing net-zero policies. I argued that we need to put greater emphasis on affordable, reliable domestic energy, rather than continually compensating households through temporary support schemes.
🏛️ Why Is Council Tax Funding Social Care?
Mike questioned what people actually receive for their council tax, joking that his £115 monthly bill largely seemed to pay for emptying his bins.
But there’s a bigger issue.
Local authorities are responsible for funding adult social care and children’s services, alongside the everyday services people associate with council tax.
As the population ages and care costs increase, growing amounts of council spending are being absorbed by these responsibilities.
I argued that adult social care should be funded nationally, taking some of the pressure off local councils and allowing them to concentrate more resources on local services.
Of course, the costs wouldn’t disappear. But it would change how they’re funded.
📉 £3 Trillion Debt and the Liz Truss Comparison
We also discussed Britain’s public finances and the continued references to Liz Truss’s 2022 mini-Budget.
September borrowing reached £24.5 billion, the second-highest September figure on record, while public debt passed £3 trillion.
The mini-Budget caused immediate financial market turmoil, even though many of its proposed measures were subsequently reversed.
But households remortgaging today are facing another difficult period, with rising inflation, energy costs and mortgage rates.
The question is how today’s Government intends to tackle those pressures rather than continually revisiting the decisions of previous administrations.
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✍️ Jamie Jenkins
Stats Jamie | Stats, Facts & Opinions
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