Is there a subtle message hidden in the fact that that Labour is delivering its first budget in almost 15 years on the day before Halloween?

Prime Minster Keir Starmer has predicted of a ‘painful’ budget which will pull on the purse strings of many individuals and businesses to plug the “black hole” in the country’s finances, inherited from his predecessors.

What will be the impact on the working people of Britain, the rich and famous, businesses large and small and on the insurance sector?

Getting out of a big black hole

As well as ensuring the £22 billion black hole in public finances doesn’t get any deeper, the chancellor will be under pressure to boost economic growth, bolster housebuilding and address skills and staff shortages. These priorities will undoubtedly have knock-on implications for the insurance industry.

According to the Institute of Directors, the government could implement various labour market interventions that will help improve the number, availability and calibre of workers in the UK.

But behind every silver lining there is a cloud. According to the Health and Safety Executive (HSE), workers are as likely to have an accident in their first six months at work as during the whole of the rest of their working life. This raises the concern that we may experience a spike in employers’ liability claims.

Biba calls time on taxing times ahead

Insurance premium tax (IPT), a tax on the price of an insurance product which functions as an indirect tax on consumers and businesses is collected by insurers and then paid to HMRC. The current rate of 12% is a considerable financial burden on households and businesses.

BIBA believes that this is a tax on the poor and vulnerable – and on businesses at a time when they should be investing more in risk management, not hidden insurance costs, so that they can take considered risks to ensure business growth.

In its submission to the Treasury, Biba called for the new government to cut the rate of IPT from 12% to 10% and to implement exemptions such as cyber insurance products to increase take-up from SMEs.

Biba has also reiterated the need for government to commit to long-term investment in flood defences and other climate related impacts to reduce the adverse effects of flooding on people, businesses, communities and insurance premiums.

In the broker space, the threat of an increase in capital gains tax could lead to an exodus in small and medium sized brokers looking to retreat from the sector before changes force them out.

Have you got broad shoulders?

Starmer has even warned that things will have to get worse before they get better. He also hinted that the biggest burden would be borne by those with the ‘broadest shoulders.’

But who do these shoulders belong to that should be afraid of Chancellor Rachel Reeves and her Halloween Budget?

Not the ‘working people’ of Britain. The government pledged not to increase taxes for this demographic suggesting that Income Tax and National Insurance are expected to remain unchanged.

Similarly, SMEs should be reassured by Labour’s commitment to providing stability and certainty over taxation policies with predications that corporation tax will be capped at 25% for the duration of the current Government’s term in office.

Reeves is also expected to introduce a business roadmap outlining changes to corporation tax reliefs and capital allowances for the next five years. This will help business owners make more informed decisions about investing in staff, training, NPD, premises and equipment.

But large corporates, non-doms and high earners who are rich in profits, property, shares and assets beware.

Your broad shoulders are likely to be burdened with hikes in capital gains tax, inheritance and dividend tax changes plus the possible elimination of business assets disposal relief.

 If you have children at private school, the blow will be even harder.