The Waffle Bomb: What did Rachel Reeves’ pre-budget speech tell us about what’s coming our way!
Yesterday, the Chancellor, Rachel Reeves, delivered a rare pre-budget speech from Downing Street — a move that immediately drew attention across the business and financial community. The tone was serious, the language carefully chosen, and the message clear: tough decisions are coming.
However, she didn’t sugar-coat the economic backdrop. Reeves spoke of high borrowing costs, low productivity, global trade headwinds, and persistent inflation — setting the stage for what she called “necessary choices in a world that has thrown more challenges our way.”
And perhaps most significantly for most, she refused to rule out tax rises, despite earlier manifesto pledges not to raise income tax, VAT, or National Insurance for working people.
But what did the Chancellor actually say? Was it really the “waffle bomb” that the Conservative party in opposition made it out to be? We asked the RPGCC team for their thoughts and comments on what the Chancellor had to say yesterday.
Wes Mason, our head of Owner Managed Business added, “for business owners some of the Chancellor’s immediate points will not be just political rhetoric, they will have an immediate and practical implications for businesses”.
The RPGCC team suggested the business owners should consider planning now in the following areas:
- Cashflow: Potential increases in corporate tax, Income Tax, employer National Insurance, or other levies could tighten margins.
- Capital investment: Timing matters — upcoming changes to capital allowances or R&D reliefs could influence when to invest.
- Owner remuneration: Directors should reassess their mix of salaries, dividends, pensions, and benefits – could it be worth bringing forward drawings (if cashflow allows) to lock in current tax rates?
- Staffing and growth: Higher taxes or reduced incentives may impact hiring, pay rises, and expansion plans.
What did Reeves actually say in her pre-budget speech?
While short on fiscal detail, it is already clear that Reeves will be framing her forthcoming 26 November Budget around three themes: growth, fairness, and strong foundations. She reaffirmed two key fiscal rules:
- No borrowing to fund day-to-day spending by the end of this Parliament.
- Reducing government debt as a share of national income within the same timeframe.
Put simply, if the numbers don’t add up, tax rises or spending cuts are inevitable.
Tim Humphries, RPGCC’s head of tax commented “It is no secret that based on current estimates there is a £20–25bn gap in the public finances. Some have pointed out that previous cuts to Employee’s National Insurance alone cost over £20bn. With the Chancellor reluctant to reverse that decision, the government is now searching for revenue elsewhere”.
An idea circulating in policy circles is a potential cut to National Insurance alongside a rise in Income Tax — a move that might technically honour previous pledges while still increasing the tax burden overall. Complex, politically awkward, but entirely possible.
Maybe the Chancellor’s speech was the “waffle bomb” before the blast — is she testing the waters giving the Government 3 weeks to see how the public will react to the idea, or maybe the Chancellor is preparing the public now for the manifesto promises that are about to be broken in a few weeks’ time. It’s not our job to speculate, we can only comment on facts!
Pre-budget Speech – what can private clients and business owners do now?
While we can’t control government decisions, we can control how we respond. Following the Chancellor’s pre-budget speech Businesses and individuals alike should be taking practical steps now to build resilience against possible tax or policy changes.
At RPGCC, our advice is to:
- Review your budgets and forecasts: Build scenarios that factor in and plan for potential tax rises or reduced reliefs.
- Recalculate your personal income requirements: Understand exactly what you need after tax to sustain your lifestyle and business plans. Will you need to adjust your spending?
- Review capital investment timing: Depending on what’s announced, acting sooner (rather than later) may save you money.
Pre-budget speech, what’s next? Why not join us
With so much uncertainty ahead, staying informed will be key. Our full Budget Report — with expert commentary and practical insights for business owners, investors, and individuals — will be available to download free in PDF on 27 November.
Join us for our free live webinar on 28 November at 9:00am, where our experts will unpack:
- The detail behind Reeves’ Budget measures
- The reaction from financial markets and the public
- What it all means for your tax, cashflow, and long-term planning
Register now to reserve your place — and get the clarity you’ll need to plan ahead with confidence. Talk to us on 020 7870 9050 or email us at hello@rpgcc.co.uk.
