Asking AI about the Autumn UK budget

As the Autumn budget is coming up, I wondered what AI would suggest. 

Background

For many years I felt angry and upset about how we were governed in the UK. It felt like we were being let down by those we trusted to take care of our country. 

Issues

With the change in government, we were given hope that grown ups were now taking over. Issues such as immigration, cost of living, the economy and the NHS continue to frustrate me. The government can do more and be better, but it does seem they actually are taking some steps in the right direction. 

Stability was the biggest failing of the former government, with constant changes in leadership and management. It also seemed there was a significant amount of financial irresponsibility previously. 

Is this a popular government? I'd say no. They do need to do more to win the public. They need to communicate better and more effectively, to be more in touch with the mood and problems of the people. 

The Future

I see so much potential in this country and I think we need more about what our vision for the future is too. 

First and foremost fix the urgent issues of everyday people - security, health and money. They go to the core of people's happiness. If people are happy, they are not complaining and we will thrive.

The international stage has been a huge distraction and it is a difficult balance for them to deal with both the problems at home and abroad. I'm glad we're not in a war and that we have a role in global issues. 

The budget 

The next budget needs to do more. I asked copilot, and this is what it suggested:

An ideal UK budget would balance economic growth with public trust by investing in the NHS, tackling the cost of living, reforming immigration systems, and strengthening international security — all while reinforcing Labour’s leadership on fairness and renewal.

Here’s how the next budget could achieve this:

1. Cost of Living: Relief + Growth

Raise Universal Credit thresholds and expand eligibility to support low-income households.

Freeze energy bills for vulnerable groups and invest in home insulation to reduce long-term costs.
Cut VAT on essential goods or offer targeted subsidies for food and transport.
Support small businesses with tax relief and grants to stimulate local economies.

Impact: Eases pressure on households, boosts consumer confidence, and shows Labour is responsive to everyday struggles.

2. NHS: Funding + Reform

Increase NHS funding by £29 billion annually, as outlined in the 2025 Spending Review.
Expand GP and mental health services, especially in underserved areas.
Invest in NHS workforce retention through pay rises and training programs.
Digitize health records and streamline admin to reduce wait times and improve care delivery.

Impact: Demonstrates commitment to public health and tackles one of the UK’s most urgent concerns

3. Immigration: Fairness + Control

End hotel use for asylum seekers by investing in community-based housing and faster processing.
Launch a Border Security Command to disrupt smuggling networks and improve border safety.
Create legal migration pathways tied to labour market needs, especially in care and construction.
Support integration through language training and civic service opportunities.

Impact: Balances compassion with control, addressing public concerns while upholding human rights.

4. International Security: Stability + Strategy

Increase defence spending modestly, focusing on cyber defence and NATO commitments.
Expand humanitarian aid and climate resilience funding to stabilize fragile regions.
Strengthen diplomatic ties through trade and security partnerships, especially post-Brexit.

Impact: Positions the UK as a responsible global actor and reinforces national security.

5. Economic Growth: Investment + Innovation

Boost infrastructure spending in transport, housing, and green energy.
Create a National Innovation Fund to support AI, biotech, and clean tech startups.
Reform business rates to support high streets and attract investment.
Introduce a Green Jobs Guarantee to train workers for the low-carbon economy.

Impact: Drives long-term growth, job creation, and climate leadership.

I asked about interest rates, electricity and a wealth tax, as I think these go to the heart of some of our problems. This was copilots response. 

To improve the UK economy and Labour’s popularity, the next budget should address interest rates, electricity prices, and wealth taxation with targeted, equitable reforms that ease household pressure and signal fiscal responsibility.

Here’s how each issue could be tackled:

Interest Rates: Coordination with the Bank of England

Current status: Interest rates remain at 4% due to persistent inflation (3.8%)

• • Budget strategy:

    • Avoid inflationary spending that could force further rate hikes.

    • Focus on targeted support (e.g. energy subsidies, childcare relief) rather than broad stimulus.

    • Signal fiscal discipline to reassure markets and support future rate cuts.

  Why it matters: Lower interest rates reduce mortgage and loan costs, boosting consumer confidence and spending.
  Electricity Prices: Energy Security + Affordability

  
  

  Current pressure: Energy bills remain high, especially for low-income households.
  Budget strategy:
  Expand windfall taxes on energy giants to fund household rebates.
  Invest in renewables and grid upgrades to reduce long-term costs.
  Introduce tiered pricing: lower rates for essential usage, higher for luxury consumption.

  Why it matters: Tackling energy costs directly addresses the cost-of-living crisis and supports climate goals.

  Wealth Tax: Fairness + Revenue

  Current proposals: Chancellor Rachel Reeves is expected to target asset-rich households, not earnings.
  Budget strategy:
  Introduce a mansion tax on properties above £2 million.
  Reform capital gains and inheritance tax to close loopholes and raise revenue.
  Consider a net wealth tax on assets above £10 million, with exemptions for pensions and primary residences.

  Why it matters: A well-designed wealth tax can raise billions without hurting middle-income earners — reinforcing Labour’s fairness narrative.

My final question to copilot related to wealth taxes and how they can try to get this right. It suggested on unintended consequences:

1. Capital Flight and Tax Avoidance

High-net-worth individuals may move assets offshore or relocate to avoid the tax.
Complex asset structures (trusts, offshore holdings) make enforcement difficult.

Avoidance strategy:

Introduce exit taxes for those relocating wealth abroad.
Strengthen international cooperation on asset transparency and reporting.
Phase in the tax gradually to allow compliance and planning.

2. Reduced Investment and Growth

Investors may shift capital away from UK businesses, especially startups and property.
Long-term GDP could decline by 2–5% based on modelling from Germany and the US.

Avoidance strategy:

Exempt productive assets like business equity, pensions, and farmland.
Offer investment incentives alongside the tax (e.g. R&D credits, green bonds).
Cap the tax at a modest rate (e.g. 1–2%) to avoid discouraging entrepreneurship.

3. Administrative Complexity

Valuing illiquid assets (art, private companies) is difficult and costly.
Enforcement requires significant HMRC resources.

Avoidance strategy:

Focus on high-value, easily valued assets (e.g. property, listed shares).
Use self-reporting with audit triggers for complex cases.
Pilot the tax with ultra-high-net-worth individuals before scaling.

4. Political and Media Backlash

Lobby groups may frame it as anti-business or punitive.
Media may amplify fears of middle-class impact.

 Avoidance strategy:

Frame the tax as a fairness measure, not a punishment.
Use clear thresholds (e.g. assets over £10 million) to reassure middle-income voters.
Highlight public benefits: NHS funding, energy relief, education investment.

Definitely the biggest concern is investors shifting capital away from UK businesses, especially startups and property. We need to encourage this and I was tempted to ask AI more about this. But ultimately this is the job of governments and civil servants. 

I hope the UK government do work out a good budget with the help of AI, as that sets the framework and landscape for the future, so we are all happier and healthier this time next year.