The Budget is the ‘big one’, as political announcements go, as it tends to affect a wider range of UK citizens than any other decision-making process.
Budget 2018, which will outline spending plans for the next financial year starting in April, takes place on Monday and will be announced live at roughly 15:30. It will unveil details of any tax rises we can expect to endure in the coming months, increases or decreases to public spending and how on earth the government intends to pay for the financial shortcomings of Brexit.
Oh, and we’ll also find out whether the cost of a pint of the good stuff will rise in our local pubs.
The Budget is crucial for so many people across the United Kingdom, and in a dose of good news – and definitely not to deflect from the government’s complete mishandling of the Brexit negotiations – it is believed that the era of austerity is coming to an ed.
The bad news? Tax rises might be implemented to pay for it.
What is Austerity? And Why Have We Tolerated it For So Long?
Although I don’t have an Oxford dictionary to hand, the general definition of austerity refers to living within your means, i.e. not spending more than you bring in.
If you were ever told by a grandparent to ‘tighten your belt and braces’, in a financial context, then they were basically referring to being austere with your cash.
What does this mean in a political context? Quite simply, the government decided that to cut national debt and to combat the economic recession of the late 2000s, they had to adopt austerity measures, which meant caps to spending on public services like the police and the NHS. And all while they allegedly and definitely weren’t entering into secret deals to buy and sell nuclear weaponry.
The upshot is that public services were sold down the river, which partly explains why the NHS is in the parlous state it is now; despite the hard work and perseverance of the doctors, nurses and specialists who continue to drive the service forward.
Unfortunately, austerity was a necessary evil….if the Tories are to be believed, anyway.
Happily, it appears as if austerity measures are set to come to an end, with Theresa May stating at the Conservative Party Conference that ‘there are better days ahead’.
So now the onus is on Phillip Hammond, the chancellor, to flick through his Excel spreadsheets and look down the back of the sofa for spare change to put towards the new free spirited spending initiative introduced by the Prime Minister.
The bad news is that ordinary folk like you and I may be the ones coughing up the majority of the shortfall.
Will My Taxes Rise in Budget 2018?
The Conservatives have been tinkering around with income thresholds for a number of years, which relate to how much money you can earn before going up a tax bracket.
In their 2017 election manifesto, the Tories hinted that they would increase the income tax threshold – known as the personal allowance – to £12,500, with the higher tax rate increase to workers who earn £50,000 a year or more.
But reports suggest that the government plans to freeze those plans for the time being, meaning that while most workers in the UK won’t be given better conditions in terms of paying lower income tax amounts, you also shouldn’t be paying more in the next financial year either.
Mind you, it’s not all good news. Hammond told the BBC that ‘we may have to raise a little more tax in order to support the NHS and deliver on our pledge’, and so it’s likely we will be hit in the pocket in other ways, perhaps with council tax increases.
“I will always do everything I can to minimise the necessity for any increases in taxation, and to keep the burden of taxes as low as I possibly can,” he continued.
What About the Cost of a Pint and a Tank of Petrol?
One way in which the government loves to raise extra funds is in so-called ‘sin taxes’, i.e. price increases on booze, fags and the like.
That’s because they can hide behind stats and costs to the NHS of over-consumption of alcohol and nicotine; making a price rise a necessary function.
So, it is quite possible that a pint at your local will go up in price in the coming months.
As for petrol, Theresa May said at the Party Conference that fuel duty would be frozen for a ninth consecutive year; even though an increase could generate an estimated £800m in revenue.
That said, there are market conditions which also govern the price of petrol, and so even with May’s announcement that’s not to suggest the price of filling your tank won’t go up in the future.