The North Sea hasn\u2019t escaped its taxes: Fossil fuel lobbyists were desperate to see a cut in the so-called Windfall Tax, which, oil and gas firms say, limits investment and jobs in the North Sea. But Rachel Reeves ultimately decided to keep the tax in place until 2030 (even if North Sea firms did get a sop through rules announced today, which will allow them to produce oil and gas in areas linked to existing, licensed sites.) Fossil fuel lobbyists, Offshore Energies UK, were very unimpressed. \u201cThe government was warned of the dangers of inaction. They must now own the consequences and reconsider,\u201d it said.<\/p>\n
Financial services<\/p>\n
Pension tax changes won\u2019t arrive for some time: The widely expected cut in tax breaks for pension salary sacrifice is set to go ahead, but it will be implemented far later than thought. The thresholds for exemption from national insurance taxes on salary sacrifice contributions will be lowered from \u00a360,000 to \u00a32,000 in April 2029, likely to improve forecasts for deficit cuts in the later years of the OBR\u2019s forecasts.<\/p>\n
The OBR has a markets warning: The U.K.\u2019s fiscal watchdog warned that the price-to-earnings ratio among U.S. equities is reminiscent of the dotcom bubble and post-pandemic rally in 2021, which were both followed by significant market crashes. The OBR estimated a global stock market collapse could cause a \u00a3121 billion hike in U.K. government debt by 2030 and slash U.K. growth by 0.6 percent in 2027-28. Even if the U.K. managed to stay isolated from the equity collapse, the OBR reckons the government would still incur \u00a361 billion in Public Sector Net Financial Liabilities.<\/p>\n
Banks back British investments: British banks and investment houses have signed an agreement with the Treasury to create \u201cinvest in Britain\u201d hubs to boost retail investment in U.K. stocks, a plan revealed<\/a> by POLITICO last week. Reeves also finally tabled a cut to the tax-free cash ISA allowance: \u00a312,000 from spring 2027 (the amount and timings also revealed<\/a> by POLITICO last week), down from \u00a320,000, with \u00a38,000 slated for investments only. Over-65s will keep the full tax-free subscription amount. Also hidden in the documents was an upcoming consultation to replace the lifetime ISA with a \u201cnew, simpler ISA product to support first-time buyers to buy a home.\u201d<\/p>\n