While only briefly mentioned in the King’s Speech, the government has now revealed more details of the Renters’ Rights Bill. The Bill will overhaul the private rented sector in England, with some elements also applicable to Wales.

Labour’s election manifesto promised to immediately banish no-fault evictions, but this hasn’t happened. Instead, no-fault evictions will be abolished under the Bill with no changes likely until autumn 2024 at the earliest.

The government has promised expanded possession grounds for landlords to reclaim property, but this won’t help when repossession involves a lengthy court process. This is likely to mean that the requirement for a rent guarantor will become more widespread.

Changes include:

• Tenants will be given the power to challenge a rent increase if it is a means to eviction.
• Landlords will not be able to unreasonably refuse a tenant having a pet. This is an important issue for many landlords, because it can subsequently be difficult to relet a property where there has been a pet. Even though landlords will be able to request pet insurance, this is unlikely to be a satisfactory solution.
• Landlords will have to fix damp and mould issues within strict time limits – known as ‘Awaab’s Law’. There will be clear legal expectations about the period within which homes must be made safe from serious hazards.
• Landlords will not be able to discriminate against tenants who receive benefits or have children.
• The practice of rental bidding wars by landlords and letting agents will be stopped, although this practice seems much less prevalent than the government thinks.

Although many of the changes will be unwelcome, Scottish and Welsh landlords have seen more radical measures introduced in favour of tenants. There is also no mention of rent controls.

The government’s background briefing on the Renters’ Rights Bill can be found here starting at page 68.

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The date of the next Budget has been announced, accompanied by the new Chancellor’s warning about government finances.

Chancellor Rachel Reeves’ first announcement on entering 11 Downing Street was the commissioning of a ‘spending inheritance’ review from the Treasury. Her decision to do so was questioned by the opposition (Conservatives), among others, who argued that the state of public finances had been made clear in the report from the Office of Budget Responsibility (OBR) in March. However, the OBR’s grim outlook was studiously ignored during the election campaign by both main parties, prompting the Institute for Fiscal Studies to complain of “a conspiracy of silence”.

Post-election, the new ministers were told to ‘bring out your dead’ – pull together their departments’ financial problems. The result was a steady flow of dire warnings on prisons, the NHS, universities, and more. This was followed by a welter of gloomy reports from the National Audit Office on 23 July, the publication of which had been delayed by the election.

Finally, on 29 July, Rachel Reeves bundled the bad news inside her Treasury-commissioned review and broke the IFS’s conspiracy of silence. In her words, “There were things that I did not know”, which in total represented a projected overspend of £22 billion in the current financial year. Two immediate actions she announced in response were to:

• scrap the winter fuel allowance, other than for those on means-tested benefits; and
• abandon the introduction of new capped social care funding rules in England, which had been due to start in October 2025.

Ms Reeves also revealed that her Autumn Budget would be on 30 October, later than had originally been expected. Her July statement made clear that there would be action on tax to fill the £22bn ‘black hole’, but reiterated Labour’s manifesto pledge that there would be no increases in national insurance, the basic, higher, or additional rates of income tax, or VAT. That points to capital gains tax, inheritance tax and tax reliefs as possible revenue-raising targets in the autumn.

If you are considering any financial planning in the near term – perhaps pension contributions of gifts to grandchildren – talk to us about the wisdom (or otherwise) of acting before 30 October.

Full details of the Chancellor’s statement can be found here.

Photo by Eduardo Casajús Gorostiaga on Unsplash

With a majority of over 200 and a weight of expectations, what happens next for Sir Kier Starmer’s new Labour government?

The importance of the first 100 days of a new government cannot be understated. Within that period the new incumbent has the greatest political capital to take bold actions, as well as the greatest opportunity to lay the blame for ‘inherited’ problems on its predecessor.

Given the timing of the election, Labour’s first 100 days are a little complicated and will look something like this:

17 July This date has been set for the State Opening of Parliament and the King’s Speech. Before then parliament will have gone through the process of electing a Commons Speaker and swearing in the fresh intake of MPs.

The King’s Speech will provide an insight into the new government’s immediate priorities and could reveal the first surprises.

Early August? The House of Commons was due to start its summer recess on 23 July before the election was called, but that would not leave enough time for the debate of the King’s Speech. Unless the summer recess is delayed, the new government won’t have time to get to work on those commitments.

13 September Presuming one of Chancellor Rachel Reeves’s first acts was to give notice to the Office for Budget Responsibility on 5 July to start preparing its Economic and Fiscal Outlook, then – perhaps ominously – Friday 13 September would be the earliest date she could give her Budget. However, speculation is growing that there will be no Budget before October. One reason is 22 September…

22 September The Labour Party conference in Liverpool runs from 22–25 September 2024. Previously parliament has had a three-to-four-week recess to cover the conference season. The new government may reduce the length of this recess, although it is unlikely that Labour MPs will be at Westminster rather than at what is set to be a victory conference.

12 October Counting from 5 July, 12 October will mark the end of Labour’s first 100 days. As suggested, we could still be waiting for Rachel Reeves’ first Budget. At her first speech and press conference at the Treasury on 8 July, she confirmed she will present an interim report to Parliament on the state of the government’s finances, or Labour’s “spending inheritance”, before the recess, with the Budget to come later. She may combine her fiscal premiere with the announcement of the Spending Review as the two are closely related.

There. That’s my musing over and done with. Thoughts?

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What was almost certainly the last Budget before the election was a serving of the widely expected, sprinkled with a handful of small surprises.

The Chancellor of the Exchequer, Jeremy Hunt, delivered the Spring Budget 2024 on 6 March. As anticipated, it was a typical pre-election event focused on tax relief measures – including further national insurance contributions (NICs) cuts – and the promise of a new savings bond from National Savings.

With little fiscal wriggle room, Mr Hunt was unable to give away as much as some of his backbenchers may have wanted, yet managed to hit some political targets, including co-opting Labour’s flagship scrapping of non-domicile rules.

Key announcements

The main headlines and changes to grapple with are:

• High income child benefit charge (HICBC): This unpopular tax charge will undergo a two-stage reform. Firstly, in 2024/25, the income threshold rises in 2024/25 with a £10,000 increase from £50,000 to £60,000 with a halving of the rate of charge. As a result, the full 100% HICBC charge will apply once individual income exceeds £80,000. Secondly, by April 2026, the income threshold will be switched from an individual basis to a household basis.
• National insurance contributions (NICs): From 6 April 2024, the main rates of employee (class 1) and self-employed (class 4) NICs will be cut by two percentage points to 8% and 6% respectively, doubling down on the cuts announced in last November’s Autumn Statement. The maximum annual saving is £754.
• Residential property: In 2024/25, the maximum capital gains tax rate on residential property gains will fall to 24%. The lowered rate may encourage more buy-to-let investors to sell up rather than pay higher mortgage rates at the end of their fixed-rate deals. It may have a similar impact on holiday cottage owners, as the favourable tax rules for furnished holiday lets will be scrapped from April 2025.
• UK ISA: The Chancellor issued a consultation paper on a new ‘UK ISA’. This will have a contribution limit of £5,000 – in addition to the existing overall £20,000 ISA limit (unchanged since 2017/18). However, investments will have to be primarily in the UK, probably both shares and bonds. There was no specific timeline on the proposal.

These Budget changes may affect you personally or your business. For more information on any aspect of the implications of the Budget, please contact us.

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The energy price guarantee of £2,500 was extended in the March Budget for a further three months, which is welcome news for employees and any small business owners who work out of residential accommodation.

The extension of the energy price guarantee runs from 1 April to 30 June and should bridge the gap to the lower prices predicted for the summer.

The three months of additional support is somewhat less generous than that being given to business customers, who will benefit until 31 March 2024.

Price guarantee

The guarantee is a temporary government subsidy that limits the annual energy costs for a typical household. The scheme covers households in England, Scotland and Wales.

• An important point is that the price guarantee is based on a typical household but can be more or less depending on energy usage.
• The price guarantee was set to increase to £3,000 from 1 April, but this increase has now been postponed until 1 July.
• Household energy prices are currently set at the lower of the price guarantee and a price cap. The price cap is set by Ofgem, the energy regulator, and is forecast to be as low as £2,000 for the second half of 2023. So this figure would then apply, rather than the higher £3,000 price guarantee.

Despite the continuance of the price guarantee, many households will still see higher energy bills from April onwards. This is because the £400 government support scheme came to an end in March, which was given as a monthly credit of £66 or £67 against energy bills.

Fixed deals

Those on fixed energy deals should keep a watchful eye on energy prices. A fixed price tariff could well be higher than the price cap from July onwards, so it might then be beneficial – if permitted – to move to an energy supplier’s standard tariff.

Details of the energy price guarantee can be found here.

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