Michael Moore's Outlook on the Budget and beyond

This late in the year we are accustomed to the gradual switch of mood from the relentlessness of autumn to the more relaxing festive period. From the earliest Christmas trees in November, to the unremitting retail noise as we get closer to Christmas, that’s certainly the hope, anyway.

Charles Dickens and Dr Seuss are amongst the few to counter the seasonal vibe, with ‘A Christmas Carol’ and ‘The Grinch’ offering a measure of challenge to the prevailing ‘feel good’ atmosphere. But here in the UK we are in danger of cementing another unwelcome festive tradition – the ‘Challenging Winter Budget’.

I started writing this column three years ago, in the aftermath of Kwasi Kwarteng’s infamous, so-called ‘mini-Budget’. Almost immediately there was an ‘Autumn Statement’ by a new chancellor, Jeremy Hunt, which was a sober affair, as conditions dictated. Ditto the Autumn Statement in 2023.

As an aside, the particular amongst you will rightly say that these were what officials would call ‘fiscal events’, rather than ‘Budgets’. However, applying the ‘Duck Test’ (‘if it walks like a duck and quacks like a duck, it’s a duck’), the substance of each was akin to a Budget, and had the same effect.

The early winter Budget last year, Labour’s first since Alistair Darling’s last one in March 2010, while the Great Financial Crisis raged, maintained the dreich (as in miserable Scottish weather) trend line from the year before. Not everyone’s spirits were dampened, but the prospect of many hard yards on carried interest tax reforms, and the impact of employer national insurance changes, undoubtedly had an impact on private capital and the wider economy.

As I noted here a year ago, ‘There is no question that the additional costs to business have sat uneasily with the overarching growth theme. The Chancellor addressed this issue head on: “…I’m really clear I’m not coming back with more borrowing or more taxes… You can be confident we’re not going to have to come back again and do another Budget like this.”  That matters’, I concluded.

Well, certain commitments age better than others, we can all agree. Aware of the challenges, ahead of the Budget the Secretary of State for Business, Peter Kyle, kept to a headline theme saying that the government is committed to “build a pro-business, pro-wealth creation, pro-growth Britain”.

And in this year’s Budget speech, the Chancellor said: “…growth doesn't just appear out of thin air. It is built… [by] firms breaking into new markets, developing new technologies, creating new jobs and new opportunities...  Our job is not to watch from the sidelines, but to partner with them— backing them every step of the way. To match private enterprise with public ambition.” An important statement.

So, what of the substance? The Institute for Fiscal Studies estimates the newly added tax burden is £26bn over the next five years, adding to last year’s £32bn increase. It is less obviously targeted at business as a whole this time, though particular sectors will grimace, or worse. And while there are some welcome changes to promote entrepreneurship, this was mainly about meeting bigger welfare commitments and establishing credible fiscal headroom.

If this makes it ‘so-so’ as an outcome, it looked a lot worse ahead of the Budget. The level of speculation was extraordinary (and not in a good way), which alternatively calmed then upset the markets, and led to as many column inches in the news media as you would normally see after the fact. The Office for Budget Responsibility publishing the key measures prematurely rounded things off as chaotically as anyone could have imagined.

We pride ourselves on being nimble at the BVCA and that was put to the test in the weeks before Budget Day as we made clear to the Treasury our opposition to possible changes in income tax rates, partnership taxes and the possibility of an exit tax, the ‘toxic trio’ as someone put it. It was significant that none of these measures came to pass.

As the Chancellor’s welcome recognition in her speech highlights, the need for investment to drive growth remains critical. To get on the growth trajectory, and remain there, we now need her to get on with the pro-growth agenda, and avoid the damaging speculation we saw this year, which impacts confidence and investment plans.

For now, as we join family and friends for the different pace and pleasures of Christmas and the New Year, perhaps we can dare to hope that, in similar vein to ‘A Christmas Carol’ and ‘The Grinch’, this latest “Challenging Winter Budget’ has a twist in the tail and ends happily ever after.

 Merry Christmas and all the best for 2026!

Michael Moore
Chief Executive, BVCA

This article was originally published on 27 November 2025 on the Private Equity News website here.