Reeves' Budget could be a financial squeeze that forces GPs to the edge

Before the Budget, Speaker of the Commons Sir Lindsay Hoyle criticised the Chancellor for her readiness to chat to the media and openly disclose the contents of her Budget.

Yet, despite the leaks, despite the speculation and despite all the toing-and-froing, I wouldn’t be the first person to admit this Autumn Statement had a bit of shock factor. But while it wasn’t perhaps as disastrous as first predicted, I’m sure it will have a noticeable ripple effect through all major sections of our economy, and especially our medical sector.

I’ll lay down the facts: the UK’s medical community, and especially its GPs and primary care networks, are already hamstrung by masses of admin, limited resources and tight budgets. They’re spinning an impossible number of plates all at once, and I know this Budget will only add more strain to their workloads.

Among all the hikes, however, two specific parts of Reeves’ tax-shaking Budget, in particular, stood out: the rise in capital gains tax and, even more importantly, the rise in employers’ National Insurance.

The first will undoubtedly have an effect on GPs who own and have scaled their own practices. At the end of the day, the rise wasn’t as suffocating as first appeared, but the changes in CGT under the Business Asset Disposal Relief scheme – from 10% to 18% in 2026 – will certainly damn and straight-jacket successful practice owners looking for a reward for their hard work.

But, even before Reeves stepped up to the Despatch Box, I can’t help but feel the damage was already done. Again, speculation was rife pre-Budget, with the nearly four months between the day Labour was voted in and the day of the announcement allowing it to run rampant. We all knew tax hikes, and especially a raid on CGT, were on the horizon; nevertheless, I can’t help but think it might have pushed some practice owners to look for a premature exit.

But it’s employer NI costs that will, frankly, have the most impact.

Employer NI costs are already significant, and this rise from 13.8% to 15% from the start of the new tax year in April 2025 will only pile them on. Staffing costs currently already account for 60% of a practice’s income, and despite the 6% pay rise given to GPs earlier in July, this rise will only deepen these financial burdens.

At its core, this Budget will only leave practices even more hamstrung. It could affect the number of staff they bring on, the number of pay rises they can offer, and, worse still, the current size of their workforce. For the untrained eye, let me tell you, the impact could far outweigh the seemingly minor 1.2pp hike.

And the Chancellor’s announcement of a boost to minimum wage will only deepen this staffing cost crisis. Already sky-high staff costs are sure to soar, and GPs simply won’t have the funds to meet them. Some practices may have no choice but to reduce their workforce, meaning more work for already overburdened GPs and reduced access to services for patients. The Government is aiming to reduce waiting times, but it’ll be a near-impossible challenge with fewer GP staff on board.

Labour also used the Budget to announce £2bn of funding to modernise the NHS and roll out new technologies . I’m all for this; practices have barely any digital infrastructure and have to work with stubborn, cumbersome systems daily. But the funding is primarily geared toward hospitals, so for primary care, it’s difficult to see where the money for tech investment will come from, especially with measures like increased NI eroding practice and PCN budgets.

But I’ll distil it down even further. Despite Reeves’ injection into health spending, these tax hikes are just one episode of many that represent the friendly fire from the Government on our medical sector.

As mentioned, we had the 6% pay rise, which was grounded on the erroneous assumption that practice staff costs amounted to 40-45% of their income, then the dreaded McCloud remedy statements, many of which, though purposed to right the wrongs of the discriminatory public service pension schemes, showed awry pension input revaluations.

In short, these statements may lead some GPs to think they’re entitled to a far bigger refund than is the case. So, with HMRC only set to spot-check a certain fraction of these bloated claims, the mistake could cost the revenue hundreds of thousands, if not millions, of pounds. They’ve shot themselves in the foot.

I digress.

Reeves’ position to close the spending gap was, by all means, a mammoth task. She was stuck between a rock and a hard place and produced an acceptable Budget from the cards she was dealt.

But across our wide network of GPs, tensions are brimming. The pressures of running primary care networks at scale, with dwindling resources and increasing workloads, is a, frankly, Herculean undertaking. Reeves’ Budget won’t help. The financial constraints, despite being looser than originally thought, could push these pressures and, by extension, any discontent into overdrive – especially now that practices are supposedly considered ‘private’ enterprises.

This Autumn Budget was one of the most highly anticipated, contentious and speculated in my lifetime; yet, while I’d refrain from calling it a ‘catastrophe’, I won’t deny that it could cause uproar across certain sections of the UK and especially our medical sector. At its worst, it could push some GPs toward the exit signs.