Was the Budget a success or a dud and what will it mean for you?

0:02Welcome to This Is Money podcast sponsored by Trading 212. Download the Trading 212 app today and open a cash ISA with promo code TIM to get the 12 month bonus promo rate of 4.87%. Terms apply. I'm Georgie Frost and joining me and Simon Lambert today is Helen Crane. And coming up, the budget. What else? Don't forget you stay up to date with all the latest breaking news. Just go to thisismoney.co.uk or download the app. But before we get into it, Simon, Helen, welcome. This is such a momentous occasion, Simon. We're all three in a studio together. That's how important the budget is, isn't it?

0:37Simon Lambert: And we did get John Healy's first budget. A lot of changes. 98, in fact, costed policy measures. But amounting to, well, not a great deal. Help for energy bills and gherkin lovers. Changes to ISAs, plus a couple of new ones. Taxes on banks, savers and landlords. But what about a plan for growth? bringing down the welfare bill, getting everyone investing. Simon, Helen. Simon, first for you. Your general overview. We'll dig into the detail, but at the moment, just, you know, mark out as 10 maybe. I'll give two marks. OK. I'll give the marks out of 10 for the delivering a steady-as-we-go budget, which was the plan.

1:18Simon Lambert: You know, there was a part of me that thought John Healy might have been best off doing nothing and could have stood up and said, the best plan is to do nothing, so that's it. I'm done, and sat back down. Clearly he wasn't going to do that. But in terms of a steady as he goes budget, I'd give it a seven, because although there were 98 changes, there was not a lot that happened, but it was definitely a give with one hand and take with another, and I'm marking him down for the raid on savers. So actually, really, I'd probably give it a six, if I'm going to be entirely honest. In terms of the budget that we actually need and the radical change we need in this country to sort out our finances, to deal with welfare spending, to get growth going, to sort out our mess of a tax system, one.

2:07Simon Lambert: Right. Because it wasn't that. What was the one for? Just because you didn't want to give a zero? He didn't make the tax system much worse. Okay. I mean, there's a fairly low bar from his predecessors on that one who have been busily making the tax system considerably worse. So he didn't make taxes much worse. And he reversed the cash ISO cut, which would have made the tax system worse and was a really stupid idea. So he gets one point for that. And but as I said, really, it wasn't that kind of budget. So it's not fair to mark him on that. So really, it's a six or a seven. Helen, do you know what it sort of reminded me of?

2:45You know the manager that says, let's arrange a meeting at 4.30 on a Friday afternoon when it so could have just been an email? Or do you know what? You didn't need to do it at all. And I genuinely thought, what really is in this? I feel like there was nothing, like Simon said, we've got a couple of reviews into welfare that don't come out until November, so couldn't really do anything on that. We've got a task force, I think, looking into defence. Couldn't really do a lot about that. energy. We got a few tinkering around the sides with a bit of help for cost of living. But in terms of what's actually needed in terms of investment in infrastructure, didn't get a lot of information about that.

3:20I'm a bit none the wiser. Are you as the direction? Because he did say it was etched into every word of the budget, the direction the country was going in. Well, I don't know what budget I was reading because it wasn't the same as what he'd written.

3:31Helen Crane: I agree. I think it was quite boring. The headline message was breathing space, this idea of, you know giving people a bit of breathing space we can't do massive giveaways but we're going to try and do these little things to make life a bit easier for I guess you know people on the lower end of the income spectrum but but you're right we we already knew a lot of the stuff that was going to be in it to be honest it's been a bit different from if we looked at the last couple of budgets last year under Rachel Reeves a lot of stuff was leaked ahead of time stuff wasn't really leaked this time but stuff was just announced before the budget um like we had this first homes plan that came out a few weeks ago um some of the other things were just kind of put out ahead of time so that that kind of made it even more boring because the stuff that could have been a bit interesting is that had actually already been put out there so you're right it wasn't it wasn't a glamorous and exciting spectacle as budgets go Simon as a journalist you work behind the scenes you know more than I do about this sort of thing.

4:32There were loads of announcements. I think on the morning of the budget, we got the standing charge, we've got the cash ISA announcement. Were those announcements drip fed ahead of the budget, almost to ward off the speculation? Like, what was the reason? Someone asked me, is this a pre-election budget? I know this is not a political podcast, but it sort of had the vibe of that. Do no harm.

4:54Simon Lambert: Yes, it did have the vibe of that. And Andy Burnham says he's not calling an early election. I don't know. I mean, maybe he will. It wouldn't be the worst move that he could make for himself. You know, the benefit to doing that would be that he could unshackle himself from the manifesto promises that mean that they can't do lots of things that they could otherwise do. That might be a wise move. You know, it would actually potentially put us on a footing for being able to try to sort the economy out because they won't be tied to those can't raise income tax national insurance vat corporation tax promises keep triple lock till after the next election all that kind of stuff or alternatively he might go do you know what actually why would i call an election i'm the prime minister now i wanted to be the prime minister if i call an election there's a risk that i will no longer be the prime minister so i shall not call an election you never know do you like you know you can you've seen people gamble either way there's an argument put forward to me yesterday by my father-in-law in fact who was you know saying well actually you get rid of some of those newly elected MPs that he's got he's got a huge majority but actually you trim the majority down a bit you lose some of them but you thin it out you might get a bit more loyalty behind him I don't know it's like As you said, it's not a politics podcast.

6:12Simon Lambert: It's a money podcast. But I guess... Has it done any harm if he was to, basically, the budget? No, it's not. And ultimately, John Healy looked at the can, took a run-up and gave the can a massive boot down the road. You know, this was a kick-the-can-down-the-road budget. If you're not going to fix the problems, sometimes you do need to just kick the can down the road. Sometimes kicking the can down the road is the right thing to do in the circumstances that you're in. And they had two choices. Their hands are tied on one of the choices, I think, which is the things that we need to do to actually sort stuff out.

6:57Simon Lambert: And so they had the other choice and they went, right, fine, let's kick that can down the road. It could have made things much worse and they didn't. And I think the really important bit actually is not just our personal taxes, which we'll come on to all of that stuff in a minute. It's not, you know, 100 quid bung on your energy bills. It's not that stuff. It's the bit to do with business. And John Healy has been very, very, very clear that he wants to be pro-business. He wants to get growth. He wants to support businesses to grow. He's not delivered loads of stuff that's going to promote growth, but he didn't deliver loads of stuff that's going to hamper growth.

7:37Simon Lambert: And that is the opposite, I think, of what Rachel Reeves did. And, you know, I have great sympathy with Rachel Reeves, but ultimately I look at it and I have to say she managed to do quite a bad job over the course of two budgets. Any rabbits out of the hat? I feel like I mentioned George Osborne quite a lot, just because we've got a couple of new ICES and some of the measures that were introduced, banks, bank levies, etc., all traced back down to George Osborne. But did we get any of the rabbits in the house, any genuine surprises for you, Helen?

8:09Helen Crane: I think we weren't necessarily expecting him to scrap the cut in the cash ISA limit. It was something that we campaigned for and we were really keen to happen. Why? So this is the cut from£20 ,000 to£12 ,000 of cash ISAs, which is coming in in 2027. I think because it was something that Rachel Reeves had already announced, it wasn't, you know, John Healy's hands were kind of clean on this. He could have just kept that as it was. And, you know, no one would have necessarily criticised him for it. He kind of didn't really have to do it. But I think he's looked at, he's seen that it's something that has angered a lot of savers.

8:46Helen Crane: And he's kind of, I think he's trying to say, you know, we can still encourage people to invest, which was the whole idea of all of this. but we don't necessarily have to do that by kind of strong arming them into it by cutting the cash ice limit and I think at a time when there's this general sort of sense of worry around just you know our finances and a lot of you know we're talking about things like prepping now and you know should you have a cash stash for if the the banks go down it's all a bit doom mongering and I think saying at a time like this to people you know you can put less in your cash ice it just doesn't, people are in sort of safety mode, I think.

9:25Helen Crane: It's a good thing to do to just say, you know, don't worry, you can put as much as you want in your sort of safety fund. I think it's quite a good move. I thought they were telling us to prepare us for a massive defence spend, which, again, can's kicking down the road. Simon?

9:39Simon Lambert: Oh, I was just going to say on the cash ISA thing, I think what's interesting there is it didn't really count as a rabbit from the hat in the actual budget itself. Yeah, we knew about it. Well, like somehow it crept out that morning. what it shows I think that's interesting is that they have listened they've listened to the people who know what they're talking about and broadly speaking most people in the investment and savings industry said that was a bad idea we were saying it was a bad idea it takes us back to a situation pre-2014 where you had separate cash and stocks and shares isa limits and we got rid of that because it was a bad system and it was going to add in complexity.

10:20Simon Lambert: And then in order to stop people trying to game the system, they were going to have to bring in new rules, you know, around sort of people holding money market funds or holding cash and investment ISAs and things like that. It was just going to make everything much more complicated. And we had a story two weeks ago where we did a kind of last ditch attempt, like save the cash ISA. You know, we spoke to our friends at Trading 212, okay, who know a lot about this because they offer a cash ISA and a stocks and shares ISA. And their customer base is huge. It's exactly the kind of people that the government is trying to get to invest.

10:54Simon Lambert: And they have repeatedly said to us, the cash ISA is a gateway to investing. What we are seeing with our customers is they open a cash ISA and then they're more likely to invest. And cutting this would be the wrong move. It will backfire. It will do the opposite of what the government wants it to do. And this is to quote George Mansellas from Trading 212, who said, our data has always supported the view that the cash ISA serves as a key driver in turning savers into investors. It shows that the government has listened to the industry, because it's listened to us and all the other people campaigning for it, it's listened to the banks, it's listened to the investment platforms.

11:31Simon Lambert: What it hasn't done is listened to the small number of people who said this was a good idea. What I just would have liked, and this goes back to my questioning about whether we needed this at all, was, look, I understand their inbox tray was probably rather large, but this feels like a decision that they could have made a few months ago. And if the whole point of it is everybody was just stuffing their cash ICES, which is what I've been reading in This Is Money, is what people have been doing, money that could otherwise have gone into investments over the last three months. But that is where we're at.

12:02Winners and losers, Simon, because we've just spoken about savers. That's a clear win for savers. However, those who don't save within an ICESA, losers. That genuinely did surprise me, I have to say, the extra 2 % on savers and landlords.

12:15Simon Lambert: I have to ask myself, what have savers done to this government to upset them so much? Why is the Labour government that was elected in 2024 seemingly waging a war on savers? What have they done? What's Mrs Miggins done to the government? There was already a two percentage point increase in tax on savings income, savings interest that had been announced by Rachel Reeves. And that was due to come in in April. And John Healy very quickly said in the budget that he was going to add another two percentage points to that. In normal persons speak, this is the rate going up by 4%. So from 20 % to 24 % for basic rate savers, 40 % to 44 % for higher rate savers.

13:03Simon Lambert: And if you're an additional rate taxpayer, which I know lots of people who listen to this podcast are because we get emails from people who are in that bracket. It's a lot of money, but there's a lot more people there because the threshold's been reduced and then not moved. Then you pay 49 percent on your savings interest from next April. That's quite a lot. As I said, John Healy said this so quickly that we were like, did he just say that? Yeah. Did he just say that? Or did he just announce? Did he just do that thing where they announced something they've already announced? And he just confirms it.

13:32That's what I thought it was.

13:32Simon Lambert: And then Aang dived into the budget documents for us, found it in there. Yeah, 2 % on the 2%, going up by 4%. I just feel like maybe the idea was, well, they can put the money in a cash ISA. But what's interesting is the people who this impacts, obviously the more money you have, the more of an impact it is, the more money you have in cash savings. But the people who are more likely to have money in cash savings tend to be the more cautious people. it's quite often something that older people people who are retired do you know i joked about mrs miggins there but it is the kind of mrs miggins type thing and and actually some of those people if they've been saving over a lifetime didn't have the same opportunity to shove money into isas as people do nowadays that 20 000 pound limit has only been 20 000 pounds for the last i'm not quite sure how many years but you could have shoved a lot into an isa i guess but if you haven't done that then you're really getting penalised right now.

14:30Simon Lambert: And some of them will be those pensioners who aren't getting the new weird two-tier pension tax break that we've had to bring in because we've frozen the personal allowance but now the pension is going up by more than it. And so we've had to create another bit of complexity in the tax system in order to deal with it. You brought it up Simon so we're going to have to stay on that for a second. Just give us more detail about this pension tax allowance thing that's been brought in, like you said, because while the losers in terms of being hit by tax were, as you say, savers, landlords, gambling and the banks, the thing that's going to be the big revenue raiser is fiscal drag, isn't it?

15:16And that's where we're at with the pensions.

15:18Simon Lambert: Fiscal drag. Yeah. I mean, that's the thing that makes us all losers, Right. Apart from the poorest pensioners now who are getting their own tax system. So this relates to the fact that the triple lock, which pushes up the state pension by the highest of either 2.5 percent average wage growth or inflation each April, is about to push the state pension through the tax three threshold. So the state pension is set to rise to£13 ,036 in April. This would mean that those who rely on it as their only income would end up paying income tax on their state pension for the first time. It does also mean that everybody else who relies on the state pension, even if it's only for a small amount of their income, will start paying income tax on it.

16:07Simon Lambert: They'll just already be paying income tax on some other income anyway. And what that does is it reduces the impact of the rise in the state pension because you've got to, you know, if those people are basic rate taxpayers, you can take 20 % off that. so they're having 20 % of it eaten by tax and you are doing that thing where you're giving people money and then taking back off them which is all a bit crazy anyway so there's been some discussion for some time as to what on earth we're going to do to deal with this and the answer that the government came up with before Andy Burnham and John Healy were in charge was that they just let off pensioners from paying tax but not all pensioners just those for whom the state pension was their only income which then created all kinds of other questions What he actually announced was that he would let pensions of paying income tax if their total income matches or is below the headline state pension, wherever that income comes from.

17:00Simon Lambert: So perhaps they might be people who are on the older pension and they don't get that full amount, but they've got some savings on top of it. As long as they match or are below it, they won't get taxed. Other people will get taxed. So other pensioners will get taxed who have got an income higher than that. this will obviously create a two-tier system where some pensioners are being let off tax other pensioners aren't being let off tax Steve Webb our pensions expert and former pensions minister has been highly critical of this especially because he said with every year that passes this is just going to get worse and also has pointed out that as it tapers away it now creates a new tax trap in the system with a potential 53 % rate we love a tax trap in this country don't we we love a tax trap now my rabbit in the hat suggestion my out there rabbit in the suggestion for the budget was that potentially john healy would just deal with this problem by announcing that the personal allowance was now going to go up with inflation and that for everyone and that would have just got rid of some of this pension fiscal drag obviously because of the next time around pension always yeah pensioners are benefiting from the average wage increase, you would have still had some fiscal drag, which then led Hugo Duncan, our business editor, to suggest that maybe he could have, he could index the personal allowance to the triple lock.

18:23Simon Lambert: So we'd then have, we'd then have like the pension going up by the highest of it, but the personal allowance is going up by the highest of it. And then we were trying to work out whether you could then link it back around the other way. You know, how circular could you make this thing? I think what this illustrates is there was a reason why tax thresholds went up with inflation in the past. And this was a principle that was enshrined in the tax system. There was a reason for it. There's two things I requested ahead of the budget, Helen. I requested a plan, clear plan, and a bit of simplification.

18:57You know, I think we could have done something about the tax system, as Simon's mentioned there. I feel that that wasn't really addressed. The pension thing is just a great example of something even more complicated. And then rather than just, as I've heard, you know, yes, some people say the cash ISA is a great gateway product into investing. There's been arguments about just using one ISA so you can, you know, save into cash and then drip feed if you want into investing. No, Helen, we didn't get just one new ISA.

19:26Simon Lambert: We got two. and then we've got a change to the lifetime ISA, although the housing part of it which got me all tied up and paying a penalty wasn't addressed. So further complication, Helen, I feel.

19:39Helen Crane: Of course, the tax system is so complicated and this budget has done absolutely nothing to change that. You're right, we have so many different ISAs now. The personal allowance has become confusing. This new pension allowance for just certain pensioners is going to confuse people And I think this all harms people who aren't like us and don't spend their whole time thinking about tax thresholds and ISA allowances. And I think so many people are just going to get caught out by all these new tricky little bits of the tax system. You know, just thinking about things like the new 2 % tax hike on money in normal savings accounts, I feel that's going to affect people who aren't necessarily hugely financially savvy, don't really think about using their ISA allowance.

20:25Helen Crane: They just kind of have their savings there, leave them be and, you know, don't expect this big tax hike kind of coming on their interest. It's going to be the kind of people who leave their finances in the backseat who are essentially harmed by all of this, I think. In terms of the ISAs, though, we don't know a lot, I believe, about the starter ISA. That's to try and get us all investing. Is that what we're calling it now? Is it the starter investing ISA? I don't know whatever it's being called. and the first time buyer isa as well again simon just more and more and more and more

20:58Simon Lambert: i would argue that the whole one isa thing is a good idea yeah yeah um you know i mean the benefit obviously of the lifetime isa and presumably the benefit of new help to buy isa is that you get a top up from the government for your saving um or your investing so if we did only have the one isa system that would potentially remove that bit where people can get a top up but maybe we could just divert that money somewhere else the starter isa i presume in order to make the starter isa different to just a normal isa maybe they'll be offering some kind of top up there or something as well i don't know but then you get into this whole like well why does that person get a top up and that person doesn't get a top up are we doing this by age we're doing this by you've never invested before.

21:43Will the government get a say for where you put that money?

21:46Simon Lambert: Exactly. Are you just going to chuck it straight into your track of funds so 60 % of it goes in the US? I mean, there's just like all kinds of things going on. It does make you realise that whilst I didn't think the British ISA was such a good idea, that actually, compared to some of the ideas, it wasn't the worst one. Yeah, yeah. Helen, as the younger person in the room, and I do appreciate though you're not that much younger but I always seem to come to you Helen for these and we think about the winners and the losers students I love this podcast because it always makes me feel so youthful it's because you look it though Helen that's why absolutely dewy skin but um yeah no students I think they were pretty disappointed by this yeah absolutely so we saw earlier in the year

22:32Helen Crane: there was this big furore about plan two student loans and these are students who arguably have the the worst deal when it comes to their loan repayments. They start repaying on the lowest salaries. Their loans go on for the longest if they don't manage to repay, I think, 40 years. And these are the ones who their interest just keeps snowballing, snowballing. And many of them say, you know, I'm not even clearing any of the debt. I'm just paying off interest every month. I'm never going to pay this off. And I think students were looking or hoping for something in this budget because the education sector had kind of made some noises, saying, you know, plan two, sorting out plan two student loans.

23:12But they'd frozen, hadn't they, the threshold at which you start paying for three years, which I just think is so cynical.

23:17Helen Crane: Yes, exactly. And that was supposed to start, or is going to start April, is it, next year? Yes, it's April next year. Hugely unfair. That's going to pull, so I think it's frozen at about£26 ,000. so if that stays still for three years more and more people are going to start having to repay their student loans it's going to mean they're going to pay more over the entire period they have the loan for as well and I think people were hopeful because the education century kind of made these noises I think she said this is the top of my in tray is addressing this threshold freeze and then nothing happened and I think they're rightfully very angry about this because student loan payments, they kind of having to pay that money and having that burden sort of filters into all other areas of your life.

24:09Helen Crane: You know, if the government's saying we're going to try and get people on the housing ladder, we're going to try and encourage younger people to start to invest. Well, like if you're paying hundreds of pounds each month to a student loan, it feels like it's never going to go away. Then you're ultimately going to feel less able to do all of those other things that the government is trying to help you do as well. So as I mentioned earlier, two areas that tax rises were announced, banks and landlords. One of the big arguments about both of those is that by taxing banks, by taxing landlords, it's going to hit the people that you don't want it to hit, tenants, us getting mortgages, etc.

24:47Is that true?

24:48Helen Crane: Yeah, absolutely it is. Do you want to think about that, Helen? No, just straight, yeah, yeah, yeah, yes, it does. It does. So this is the rising income tax on landlords and savers in non-ISIS savings accounts. So just to explain where we're at with it, Rachel Reeves had already put a 2 % rise in coming in from April 2027. John Healy has now put another 2 % rise on top of it. So it means that a basic rate taxpaying landlord today pays 20 % income tax on the money they get from rent. After expenses from April 27, that will now be 24%. So it's a big leap and something that, as Simon said, was quite unexpected.

25:34No one had really heard this coming.

25:37Helen Crane: And we've already, my colleague Ed Magnus, our property reporter, has spoken to some landlords in the last couple of days. And they've all said, yeah, we're going to either put our rents up to cover this or we're going to sell our properties. We're going to have to turf our tenants out and exit the sector. So it does ultimately affect tenants. And I think, you know, in isolation, perhaps this wouldn't be as bad. But this comes at a time when landlords have been absolutely hammered over the last few years. They've had stamp duty hikes when they buy new properties, so they now pay a 5 % extra surcharge above a normal person buying their own home.

26:20Helen Crane: The renters' rights act just came in earlier this year, making it more difficult for them to raise the rent or to evict tenants. And going back further, I think it was the last Conservative government that put in a policy which meant that they can't write their mortgage interest off as a taxable deductible anymore. So it's been on for many, many years. And I think landlords just feel like, you know what, I'm done. That's what some of the landlords that spoke to Ed said. So they're either getting out or they're putting their tenants' rents up. And, you know, of course they are. They're business people.

26:51Helen Crane: If your costs go up, then you do put people's rents up. I'm sure some of them don't want to. You know, one of the landlords we spoke to said, I really, you know, I don't like to do this to my tenants. I know this is disruptive. This is difficult. But at the end of the day, you know, I'm a business person. And why would I do this if I'm not making any money from it? So this is going to have a knock on effect on, I think, the kind of people who Labour wouldn't necessarily want it to be affected. You know, the people that they're trying to give breathing space to or say they say. Just wondering if we're going to get more cases going in front of the courts, because remember, we spoke a couple of weeks ago, was it, about that situation in Manchester where the judge decided that the landlord had to reduce rents.

27:33I wonder if we're going to get more cases like that. Simon, why do successive governments hate landlords?

27:40Simon Lambert: Well, because they're evil. Right. I think, basically. They're evil capitalist pigs. I've had some lovely landlords. I've had some awful ones, but I've had some lovely landlords. Yeah, I know. And this is the thing. It's a bit more nuanced than that, isn't it? Isn't it? Because they dance on the first-time buyers and trample them into the ground, preventing them from ever being able to afford a home, apart from the bit where they rent homes to those first-time buyers in the first place while they're trying to save a deposit. And obviously, if you drive up the cost of the landlords and then drive up the rents, then the first-time buyers becomes harder to save the deposit.

28:15Simon Lambert: It is an issue. And the problem is that this is happening at the same time as mortgage costs have gone up substantially. If you're a mortgage landlord, of which many are, because for many years it made – right, let's make no bones about it. it made financial sense to have as big a mortgage as possible if you were a buy-to-let landlord when you could offset your mortgage interest relief for tax. That shifted, but it still makes sense. And because you're not leaving a large amount of money tied up in the property, you're benefiting from leverage when it comes to the profits that you make if the value of the property goes up.

28:50Simon Lambert: But then you're also exposing yourself more to the risk of negative equity. That's the flip side. Leverage comes with risks. it's not you know just a toy to be played with however because mortgage rates have gone up by so much it has massively driven up the costs for landlords landlords cannot offset that against their tax bill anymore so the way that this works is basically landlords get their rental income in then they can take off their allowable expenses which do not include mortgage interest anymore and then they pay tax on that profit, what's deemed to be their profit, and then they get a tax credit to cover some of their mortgage interest.

29:33Simon Lambert: So effectively what this system means is that if you treat landlords and their activities as a business, for example, you think of it like a business, which you should do if you're going to be a landlord, landlords are one of the few people who actually pay tax on their revenue, not their profits because they're not able to offset the cost of those mortgages against it. Now you as a homeowner if you live in your own home you also can't offset your mortgage interest against tax that was axed a long time ago. Many of our parents generation could do that for quite a long time but you're not treating your own home like a business.

30:10Simon Lambert: Ultimately the home that you live in it's not a business. Often we're told not to even think of them as an investment. I actually think of them as a lifetime investment but people get a bit angry sometimes when you say that you've invested in your own home they're like it's not an investment it's your home um you don't think of it like a business but actually if you're a landlord it is an investment and it is a business and you're being treated differently to other businesses uh and you know you're paying tax on your revenue not on your profits and the upshot of this is exactly what you and helen just said it is driving up costs for tenants yeah and pushing landlords out of the market well you know what I feel about rental renting so I won't I won't go down that again um the banks though Simon are our mortgages going to go up we're going to pay more on our loans you know for 15 months I think that has been raised again the bank surcharge explain that I think the two main things you need to know three main things you need to know about bank surcharge is banks are going to have to pay an extra three percent uh tax on their profits so there's a bank surcharge already it's going to go from 3 % to 6%.

31:14Simon Lambert: And that's on top of the corporation tax they pay. This is to do with the fact that they're making supersized profits of higher interest rates. And they're seen as not necessarily an easy target, but an available target to try and get some more money from. So that's like the first thing you need to know. Secondly, banks did an awful lot of lobbying about this, said it's going to drive up mortgage costs, it's going to drive up loan costs, it's going to that make us give lower savings rates to save us. And the lobbying paid off. And instead of going from 3 % to 8%, which was suggested, it went from 3 % to 6%.

31:52Simon Lambert: And if you look at banks' share prices, as the budget happened, they went up. So they were taxed more. It was announced in the budget they would be taxed more. Yet their share prices jumped by between 2 % and 4 % and then kind of settled down a little bit. What that tells you is this was not as bad as what people thought and the lobbying paid off a bit. and the tax is time limited. Yes. The other thing I would say is if you look in the budget documents and you look at the numbers and you dive right into the details of the book, and again, I have a certain Mr Alex Brummer to credit for this one, you will find that the raid on savers is larger than the raid on banks.

32:30Simon Lambert: And I'll just leave that there. Well, I tell you what, one thing I can't believe we've got this far in the podcast and haven't mentioned, who here is going to get£100 off their energy bills? Just one hand goes up there, Helen.

32:42Helen Crane: So this is for people in council tax bans A to D. We're all going to get£100 payment per household towards our energy bills this winter. So, yeah, I'm going to go on a John Healy-sponsored night out. No, I'm not. You're just going to whack up the heating, aren't you, and celebrate, stick on some extra fairy lights. I was a bit surprised by this because a lot of talk was, yes, we are going to help people, cost of living, government, etc. But it's going to be a lot more targeted, which is why I think people were thinking it would be the warm home discount going up from 150 to 250, 300, whatever it was.

33:19Because I think that helps about 6 million people, whereas this is going to help 20 million people. Not me, not Simon. Bad luck, Simon.

33:28Helen Crane: I agree. Look, I do feel a bit guilty about this. I live in a flat, a two bed flat that's, you know, it's smallish, but I live in London. I don't need help paying manager bills, honestly. And I don't like the idea that I'm kind of taking this away from a pensioner in a sort of knocking around a big cold house that happens to be in a bandee somewhere else. I, you know, and I think people used to always say this about things like the winter fuel payment. Oh, I don't really need this. And I kind of feel the same. I wonder whether it could have been. Yeah, I agree. I think maybe putting up the winter fuel payment or the warm home discount would be kind of a better use of this money than giving£100 to people like me who are sort of relatively comfortably off but happen to live in a small flat in a nice area.

34:19And the reason being because we're supposed to have a big jump in energy bills, aren't we, in January because of the conflict in Iran, etc.

34:24Simon Lambert: Can I just say something about the council tax thing? Of course. Right. So the Chancellor got absolutely lumped for this one by the Institute for Fiscal Studies and by the Resolution Foundation as well for this complete lack of targeting. Obviously, as you just said, there is no direct relationship between your income and your council tax band. It's a fairly loose relationship. You're more likely to be higher up the scale if you live in a higher council tax band. But it's not guaranteed. so you will get people for whom this makes a massive difference and actually£100 every little helps and even just£100 is going to make a difference to how often they feel able to put the heating on or what they're able to afford this winter who are on very low incomes there are also a lot of people who are going to get£100 in their bank account and they're going to go out for dinner I was surprised to learn however quite how many properties are in band A to D so would you think with eight council tax bands that across the uk properties are relatively evenly spread across the eight bands i.e there's a kind of i know things have changed since night this is based on 1991 things but just allow for that even so it's based on 1991 things but would you have imagined that there was like the bottom eight for the next day for the next day for the next eighth and so on i tell you for why no because where i live or used to live was a three bed semi old council house that's my that's my house that i bought i got a letter after i'd been there for a year from the council saying because your previous owners had got rid of the toilet on the second floor right literally you couldn't fit a bed in this it's not you can't call it a bedroom But because they then said, you're a four bedroom now because you got rid of that, we're moving you up to E.

36:25So I was like, well, actually, if my house is in that, I can imagine there's a ton of houses. But I would love to know if more people are getting letters like mine, squishing them into other bands.

36:36Simon Lambert: OK, right. Sorry, that didn't answer your question. All right. Band A to D takes up is half the bands, right? OK, so that's half of the eight bands. What percentage? 80%. Yeah, 80 % is in band A to D. Is it? So there's only 20 % in the higher ones. Yeah. Including mine. That's like completely bonkers. Yeah. Why is it not spread more evenly? Because isn't that going to cost them a lot of effort to go around and re-evaluate things? But why didn't they spread it more evenly in the first place? What was the thinking behind this? This seems completely insane to me. What would you have done, Simon? What would I have done?

37:09Simon Lambert: What, with 100 quid? Targeted support. They've given 100 quid to 80 % of households. Clearly that's daft. I would have given it to less households and I probably would have done it through something like ultimately you're going to have to go through the benefit system but that's just going to make people angry because they're going to be like oh great, I go out to work hard and then the people on benefits get£100 bung with their energy bills, thanks very much kind of thing, so maybe they should have just given£100 you know what, if you're only excluding 20 % of people maybe they should have just given everyone£100 I think there were calls at the time in 22, 23 when they spent£75 billion or something on support Remember, everybody got like 400 quid to have more data infrastructure to work out which households actually needed it.

37:53They didn't do that.

37:54Simon Lambert: I mean, what I would say, this sounds a bit blunt, right? I would have maybe approached this from the angle that people should have fixed their energy bills and that they were warned about this as far back as when the Iran war kicked off. And they've had ample opportunity to fix their bills. So maybe I would only give the money to the very poorest in society who really, really need it. Because lots of other people should have gone, maybe I should listen to this and I should actually fix my bills. I've noticed that there does appear to be this war going on that's driving up energy prices. It's only about three years since we last had this happen.

38:28Simon Lambert: Perhaps I should fix my bills this time around because people could still fix below the energy price cap. Helen, what have we missed in this 98 hodgepodge kind of budget thing? which incidentally I think 64, was it 64 were announced in the budget and then 34 were mentioned before. So there you go. We did get a few actually in the budget itself. But have I missed anything, Helen, that stood out for you? Perhaps your favourite moment, your favourite policy announcement? My favourite moment. I don't know if I had a favourite moment. The end?

39:03Helen Crane: Yeah, the end. The bit where everyone sat down and we had to start really quickly writing loads of stories. No, that doesn't sound like my favourite either. But I can tell you a few things that happened that we haven't mentioned. So axing standing charges on gas bills, another energy bill measure, again, should help people in smaller properties or smaller households. But they think that the energy firm is just going to shunt some of those costs onto the unit price. So what you pay for the power you actually use. So people in larger households might be worse off from that. That's 5p fuel duty cut being extended to July 2027.

39:39Helen Crane: That kind of always happens, doesn't it? Yes, it was 15 years now, is it? Yes, since 2011. So no real surprises there. Carer's allowance, Cliff Edge, that was quite welcome, wasn't it? Yes, so that's the rule that means at the moment, if you're an unpaid carer for someone and you go out to work, if you earn more than, I think it's£204 a week, you basically get all your government help taken away. So it stops a lot of people working, say, part-time if they're a carer. That's been taken, that's been sort of changed. So it's a much fairer system for... There's a taper introduced, isn't there? Yeah, exactly.

40:16Helen Crane: So the income you earn gets taken away at a rate that's sort of proportionate to the amount of hours that you work. So that's quite welcome. There was some help for entrepreneurs. So there's this founders relief, which is a 10 % rate on lifetime gains up to 10 million for successful founders or higher trading allowance. That was an interesting one. So this is good news. People have sort of a side hustle, people who maybe sell things online or they're a dog walker. At the minute, you can earn a thousand pounds a year from this kind of enterprise without paying tax or having to do tax return. that's gone up to£3 ,000 a year I think because of just the huge rise and people having these side hustles and the administration of having to do all these people's small tax returns and they're paying kind of hardly anything anyway so that seems sort of a common sense measure and I think we might have mentioned this before but details of the Your First Home scheme so how much you're going to have to earn to be sort of excluded from it and the price of it Equity loan, like the help to buy loan that we used to see, not the ISA, isn't it?

41:32Helen Crane: Yes, sorry, this is the essentially sort of new help to buy, which you know about already, but they've given the details of who qualifies, what the property price caps are going to be. So 2.5 % deposit that you need? 2.5 % deposit and then you get an equity loan of up to 20 % from the government. So a similar thing to help to buy, has to be on new builds. But interestingly, unlike help to buy, at the beginning, they've put regional price caps on for different areas and inner London, outer London have different price caps as well. So it's more kind of tailored to affordable homes in your area rather than being a sort of blanket cap for the whole country.

42:11Helen Crane: Did you miss anything, Simon?

42:13Simon Lambert: No, I don't think so. That was very comprehensive. My favourite moment of the budget would be the bit where we got the Liz Truss mention. I like the fact that John Healy didn't stand up and just like repeatedly drone on blaming the Tories. We've seen that one a couple of times. It stopped working and he didn't do that. And I like the fact that actually both him and Andy Burnham have kind of shied away from that thing. But I do think that, you know, Liz Truss, I think it needs to be that from now on there is that thing where she has to be mentioned in every budget. We try to keep this going for perhaps as long as we can do.

42:52Simon Lambert: I'd like maybe in 30 years time for her to still be getting a mention but I'd like to see chancellors be creative about how they do it almost like that game where you've got a word that you've been told you have to drop into a speech or something and I think they should do that, I think they should keep it going and I think there was no way she could get away with releasing a book just before the budget saying it wasn't her fault just in case anybody's noticed, Liz Truss says it wasn't her fault she hasn't said that much since but apparently not Liz Truss's fault all the Bank of England's fault so she did need a mention and then I had another sort of favourite moment but that wasn't my favourite moment which was about 45 minutes in I thought he'd finished and he was about to sit down I thought he was like commending the budget to you know and everything he was like right I'm done and I was like oh my god that's it he's done it he's done 45 minutes he's sitting down that's all we're getting and then he kept going for another half Yeah.

43:49Simon Lambert: So that wasn't my favourite moment. No, just on the Liz Truss book, I mean, it's obviously all news is good news, I suppose, if you're trying to sell a book at the moment. But I've never wanted, I'm not really into those sort of political biographies and autobiographies. But I do have to say the absolute slamming that she's been getting for the book, Simon Heffer in Telegraph saying it's the most deranged thing I've ever read. Someone else also wrote Liz Truss has now shown she's as good as writer as she was a prime minister. I don't think that's a compliment. Anyway, we'll move on from that one because we've had a bit of a laugh and now we can bring it all back crashing down to earth because we've talked about what's in the budget.

44:26Obviously, afterwards, we get the OBR's appraisal and then every think tank comes out and says what they think. Where is the economy at now, Simon? Where was it before John Healy stood up? Where is it after? So what does the picture look like? Sunlit uplands or doomscape? Does anyone remember the Roaring Twenties? Do you remember we were going to get the Roaring Twenties? I remember that.

44:52Simon Lambert: We were going to get a repeat of them. After we came out of the COVID pandemic, that was it. It was going to be the second Roaring Twenties. Well, there's lots of it doing the rounds. We probably did a whole podcast on it. I want to go scrolling back through the feed. Anyway, I think basically what the OBR forecasts show, what the IFS says, what the Resolution Foundation say, is that we can pretty much knock off any hope that we're going to get the Roaring Twenties. We're in 2026 right now. We're very, very close to 2027. It's highly unlikely that we're going to get just three years of the Roaring Twenties.

45:28Simon Lambert: Roaring Twenties? God knows. I mean, disconcertingly, the last set of Thirties roared for completely the wrong reason, didn't they? but yeah a lost decade has been referred to now I've been doing this financial journalism gig for long enough that I remember the last lost decade after the financial crisis and the thing is although that is longer ago than I care to remember it wasn't that long ago I was like you're not meant to get two lost decades that quickly in succession the bit where we've actually had the best of we've had the best of the uplift in living standards that we're going to get in this decade and i don't remember that bit being that good and we're on this slow motion car crash path decline whatever the welfare bill just keeps going up there's no commitment to bring it down debt interest is going up and the reason why debt interest matters we're spending I think 120 billion pounds a year on debt interest is maybe going to hit 135 who knows um what's you know the odd 10 or 15 billion pounds on debt interest between friends each year but that is money that could be either going on public services better public services or lowering tax and in fact if we weren't paying all that money on debt interest we could have better public services and lower taxes, the holy grail of stuff getting better and just paying less money in tax.

47:02Simon Lambert: And instead, we somehow managed to have the worst of both worlds. To come back to one of my favourite things that can tell a lot about a country by the state of its roads. My road doesn't tell a good story. The potholes are unbelievable in this suburban street. Nice detached houses, you know, it's suburbia. Like, it's in theory, it's doing well. It's the bit of the country that's doing well. Nobody's getting£100 where I live. They ain't getting£100. We're not band H, but we're definitely not band D to A, okay? Nobody's getting their£100. Yet, when they leave their houses, they are dealing with a road that I would, I mean, you'd be kind if you'd said it had disintegrated.

47:52Simon Lambert: The council did come round and patch some of the potholes up weirdly last year at one point, but only like some of them and not the others. Anyway, that fell out ages ago and they've all fallen out. Council's going to fix the potholes. One of the neighbours got very excited. It went round on the neighbourhood WhatsApp thread. Appears that it's not actually going to resurface the road though. So it's basically going to come round. I think it's going to chuck some tarmac in them. The tarmac will probably, what are we in now? End of October. I'll give it Christmas, maybe if you're lucky before it started to fall out.

48:26Simon Lambert: That is my metaphor for the economy, the budget, the state that we're in. We've chucked a bit of tarmac in the holes and gone, that'll do, it'll probably fall out. But I mean, you couldn't kick a can down my road because it would fall into one of the bloody holes. True. Helen, before we leave this, just is there anything that we need to do differently with our finances after this budget?

48:50Helen Crane: I think it's become more crucial than ever to use your ISA allowance if you're not already, especially as we're going to have a whole array of new ISAs to use. And obviously, with the tax on non-ISA savings accounts going up. Other than that, just as always, you know, kind of keep an eye where things are at. Energy bills, as Simon said, if you haven't fixed, do really strongly consider doing that. It's a bit confusing at the minute. So I just had to fix my energy bills again because my two-year fix came to an end and it feels a bit wrong because I had to fix at a higher level than my old tariff was and I fixed at a time when bills were also quite expensive so you kind of look at it and think oh that's that's sort of more than I'm paying already it kind of makes you not want to do it but then if you look at what the price cap is now and especially what the price cap is probably going to be come January it's still more So it feels really counterintuitive.

49:49Helen Crane: You're like, why am I fixing in at this expensive price? But it probably is a good idea. So worth taking a look at that as well. All right, many to pick from Simon, but your stat of the week.

50:02Simon Lambert: my stats of the week 93 % that was the vote for the winning answer in our poll of do you feel this budget has been bold enough I will read you the three answers you can cast your vote and then you can tell me how you thought most people voted yes it will make a real difference no it's just tinkering around the edges and lacks ambition or it's too early to tell yeah option two that's what most people voted for 93 % of people voted for that one 93 % of more than 26 ,000 people actually sorry 27 ,000 people 93 % of them 27 ,000 people yeah there's another stat I'll give you as well this was something that was missing from the budget 62 % that is the rate that double taxation on inherited pensions is going to deliver for people who die over the age of 75 when their beneficiaries withdraw money from it that hasn't been dealt with if i was in this government and if i was john healy if i was in the treasury i would deal with that we don't need another tax trap we definitely don't need a tax trap of that order coming down the line i don't agree that inherited pensions should fall into the inheritance tax net but if we decide that that's the principle that we've done and we've stuck with it, fine, you know, they're the government, they were elected, they make the decisions, not me, but remove the double taxation.

51:37Simon Lambert: We need to do that. Don't leave it in there. All right, Simon. All right, Helen, thank you very much and thank you for listening. You can keep up to date with all the latest breaking money news. Just go to thisismoney.co.uk or download the app and if you have any comments or questions for the team or anything you'd like them to look into, give them your assessment on the budget, Simon? Yes. You can email us at podcast at thisismoney.co.uk and I would say actually on Georgie's point there, we gloss over this every week but do go download the This Is Money app. We've had an upgrade to the This Is Money app this week in time for the budget.

52:09Simon Lambert: We set ourselves a deadline. We'd managed to deliver on it. It involved me doing some stuff at half past ten the night before the budget but we got there. So it is now an even better reading experience and it is the best way to read This Is Money and get all our stories. So go download This Is Money app. You know how to do that. You go to the app store. Done. Super. And if you like our podcast, why not rate us wherever you found us? It helps other people find us too.