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“Now, here, you see, it takes all the running you can do, to keep in the same place.” Lewis Carroll’s Through the Looking Glass.

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There has already been so much written about yesterday’s Budget that there is perhaps little I can usefully add. What concerns me most, however, is Labour’s apparent lack of urgency surrounding defence spending. Given the increasingly dangerous world in which we live, surely our national security deserves greater priority. Furthermore, I have an uncomfortable feeling that yesterday’s Budget was merely an interval between tax increases.

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The additional 2% tax increase on savings income announced yesterday is, in fact, a cumulative rise of four percentage points from 6 April 2027, as Rachel Reeves had already announced a 2% increase in her previous Budget, but deferred its introduction. Basic-rate taxpayers will now pay 24%, higher-rate taxpayers 44% and additional-rate taxpayers 49%. This applies to interest on cash savings and the coupons on Gilts and corporate bonds and interest from bond distributions. The same new rates will also apply to rental income. Of course, existing tax-free allowances and exemptions remain.

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Like many, I was initially excited by the introduction of Founders’ Relief, which, on the face of it, appeared to resurrect the old Entrepreneurs’ Relief, offering a reduced Capital Gains Tax rate of just 10% on the first £10 million of qualifying gains. However, on closer inspection, the relief remains subject to consultation and comes with some demanding qualifying conditions. It is clearly aimed at a relatively small number of founders of high-growth businesses rather than the wider entrepreneurial community.

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Meanwhile, for everyone else, Business Asset Disposal Relief, formerly known as Entrepreneurs’ Relief — presumably someone thought the new name sounded better — has had its lifetime allowance reduced once again, this time from £1 million to £500,000. No doubt another measure designed to encourage private enterprise.

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Rachel Reeves’ previous decision to reduce the amount investors could hold in cash within their ISAs has been reversed. However, I am not convinced that holding large amounts of cash in an ISA is necessarily the best use of this valuable tax shelter. ISAs offer freedom from both Income Tax and Capital Gains Tax, whereas cash produces interest, but no capital growth. By holding cash, investors therefore forgo the opportunity to shelter future capital gains.

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Surely a better approach would have been to offer additional incentives to invest in British companies, perhaps by abolishing Stamp Duty on UK shares purchased within an ISA? Alternatively, the Government could have reintroduced something resembling the old TESSA, introduced under John Major, which was designed specifically for cash savings and offered tax-free interest.

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The Lifetime ISA, designed to help younger people buy their first home with a 25% government bonus, is to be replaced by the imaginatively named First Time Buyer ISA in 2029. The principal difference, apart from the compelling name change, is that the Government's contribution will be paid when a property is purchased rather than when the money is invested. The bonus will also be calculated on the final account value, subject to a £20,000 limit. The £450,000 maximum property price remains unchanged, despite having been set in 2017.

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It also seemed rather arbitrary to impose a new, albeit temporary, tax on banks to help with the cost of living. I’m not sure why banks in particular were singled out- it hardly sends an encouraging message to overseas banks considering establishing or expanding their operations in Britain.

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And finally, there are the self-employed. What was once a relatively straightforward annual tax return is becoming an increasingly complicated exercise. Making Tax Digital already requires quarterly reporting for those within its scope, and the Government now intends to move towards more frequent tax payments. I can see the attraction from the Treasury's perspective, but anyone who has run a small business knows that income and expenditure rarely arrive in convenient monthly instalments. I cannot see this running particularly smoothly.

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Perhaps the most important long-term announcement was the decision to adjust the State Pension triple lock from April 2030. The aim is to remove the ratchet effect that sees the pension rise ever higher relative to earnings, so that it tracks earnings over time. At least someone has acknowledged that the current trajectory is unsustainable. Whether the political courage lasts that long is far from certain.

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The economic backdrop hardly inspires confidence. The OBR upgraded its 2026 growth forecast to 1.2%, but inflation reached 3.5% in September and is forecast to peak at 3.8% in early 2027. Meanwhile, higher borrowing costs are expected to add an eye-watering £14 billion a year, on average, to government debt-interest payments compared with the spring forecast. Money that cannot be spent on something useful.

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The government insists its fiscal rules remain intact, with £15 billion of headroom in 2029–30. Against Britain's borrowing requirements, that's less a safety cushion and more a wafer-thin mint. One modest forecasting error and the Chancellor could be back hunting for loose change behind the Treasury sofa.

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The Chancellor has bought some breathing space without doing much to cure the underlying ailments. For now, it looks suspiciously like another expensive exercise in kicking the can down the road. At this rate, even the can will soon be subject to a tax.

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Comments from James Scott-Hopkins, Founder of EXE Capital Management and Gavin Haynes, Fairview Consulting.

The views are those of the author only.

The value of investments can fall as well as rise. Past performance is no guarantee of future returns.‍

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