UK Budget 2025: End of De Minimis, Pay-Per-Mile EV Tax & Britain’s Trump-Style Reindustrialisation

Episode Description

The UK just delivered its Autumn Budget 2025 – and it’s sending louder signals to global trade and geopolitics than most people realise.

In this unscripted, coffee-accompanied episode, Justin Hayden Miller zooms out to explore the global trade and strategic implications of Chancellor Rachel Reeves’ announcements – why the UK is rapidly becoming the world’s real-time economic laboratory, and what the rest of us should be watching for.

Key global trade and policy signals discussed:

• “If you build here, Britain will back you” – the UK’s carrot version of Trump’s industrial-policy stick
• The end of the £135 de minimis threshold: full customs duties and VAT on every imported parcel from March 2029 (yes, the same policy Trump is pushing in the US)
• Pay-per-mile road pricing for EVs from 2028 – and why it risks sending exactly the wrong green signal
• Defence spending heading to 2.6% of GDP by 2027 and Europe’s quiet pivot to a war economy
• Phasing out hotels for asylum seekers + the surprising question: will humanoid robots soon face immigration quotas?
• Why simultaneous reindustrialisation + export-led growth for every major economy is mathematically impossible

This is not a budget line-item recap. It’s a strategic conversation about protectionism dressed in new clothes, the return of industrial policy, and the fast-changing intersection of trade, technology, and geopolitics.

Essential listening for anyone involved in international supply chains, customs planning, EV strategy, geopolitical risk, or industrial policy – in any country.

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*Disclaimer: This podcast is simply for informational and entertainment purposes only and does not in way constitute legal, business, financial or other advice whatsoever. Should you require advice then please seek such from an appropriately qualified professional, explaining your specific circumstances.

Chapters

• 0:00 A Freer, Coffee-Fuelled Format
• 1:05 Why The UK Budget Matters Globally
• 2:07 Post-Brexit Slump And Political Reactions
• 3:26 Reindustrialisation And US Alignment
• 4:48 Immigration, Robots, And Labour Policy
• 6:23 Killing De Minimis For Small Parcels
• 8:49 EV Pay-Per-Mile And Price Signals
• 10:23 Red Box Rituals And Defence Spend
• 11:10 Watch The UK As A Policy Lab
• 11:42 Closing Notes And Disclaimers

Transcript

Justin Hayden Miller: 0:00

Safe to say that the tax increase decides essentially falling your host J ustin Hayden Miller decoding the policies shaping global trade and emerging trends. Hello everyone. I've decided to switch things up a bit for this particular episode. Less script, more chat, which is why today I have a special guest, my cup of fresh morning coffee. And I think I said in the first episode that I'd until my special guests arrived, I'd be accompanied by a cup of tea or a cup of coffee. Depending upon the time of day. And well, I've decided to bring it back a touch. And I might sound a little bit raw at first, perhaps, with this new formula, but I hope it's clearer. And if you miss the old, more prepared style, tell me. Either way, thanks for sticking around. So I've jotted a few points that I'd like to discuss with you subjects. I want to talk about last week's UK budget. And that's a statement by the UK Chancellor, Rachel Reeves, essentially equivalent to the Minister of Finance in many countries. And she's setting out the UK budget and the tax finance aspects for the UK. And I think this is interesting, not just for our UK listeners, but for those listening in in many, many countries. It should interest you even more so because I see the UK as a sort of test case, a guinea pig for economies that are a bit in the dundrums. So I think this should interest policymakers, politicians, and business leaders elsewhere than in the UK, especially those in economies in a similar position. I noted that the Telegraph, a UK newspaper and a right wing newspaper, stated in a recent article that UK GDP was down by 8% because of Brexit. Investment was down 18%, productivity down 4%, and employment down 4% as well because of it. And during the budget speech, the Conservative opposition leader Kemi Badenburg said government spending up, welfare spending up, universal credit claimants up, unemployment up, debt interest up, inflation up. And she said, And what about the things that you want to go up? Growth down, investment down, business confidence down, the credibility of the Chancellor, not just down through the floor. These figures are shocking. And it's true to not just the UK, but other EU countries are in the doldrums. And the UK's applied over previous years different strategies, including spending, saving, tax cuts to boost the economy and exports. So as I said, I see the UK as a guinea pig for the world to an extent because it's attempting different things and we need to see whether these things are working, to reconsider whether it's a good strategy to put in place those measures. And also I think the UK budget touches a whole realm of issues from immigration to Ukraine that are important for world trade. So what I'm getting at is the UK budget should be interesting you, whether you're British or you've got UK investments or not. One of the first things that came out from when I watched the UK budget speech was to an extent how the UK might be aligning itself with certain US positions and certain positions relating to Donald Trump. Rachel Reeves, the UK Chancellor, said, we are sending a simple message to the world. If you build here, Britain will back you. And this comes to a reindustrialization point where everyone is trying to reindustrialize, everyone's trying to export, which is a great ideal, but it's going to be unattainable for a lot of countries to be able to significantly increase their exports in order to entirely prop up their economies. We will back you. And it's it's a reindustrialization, almost a made in the UK slogan, whatever. But it's not the US position precisely. Because if Britain is saying, come to Britain, we'll back you, the US is looking at it from the opposite side of the coin. Trump is saying if you don't come to the US and manufacture in the US, we'll hit you. It's essentially the same thing. It's a question of spin. The other issue that came out of the UK budget was immigration. Chancellor mentioned clawing back excess profits from the use of hotels to house asylum seekers, phasing out the use of hotels entirely. And a lot of countries are moving towards a a quota system of accepting immigrants into their countries. And what I find interesting about this is years ago the computer came out and it was something in the corner of the room. But now we have Elon Musk manufacturing robots, Optimus. I mean Optimus, a robot that looks like a human, looks like a human, and we can assimilate that robot more closely with being a human. Post-World War II, immigration was encouraged in order to fill up the required labor market. And today we're seeing how robotics and optimus and alternatives could potentially in some manner do the same thing. So from a policy perspective, I do wonder whether people will see the production of robots as a form of immigration. And therefore, could we potentially see not only quotas for the immigration of people, robots? And if robots are becoming competitors to humans and look like humans, not only potentially could they obtain rights that I spoke of in the last episode, everything that goes with that as well, including restricted importations of robotics, or production of robotics, immigration of robotics. The second point where I think there's an alignment with the US is relating to small parcels, where the UK has announced that UK customs duties will apply on UK importations of parcels of any value. No, so there won't be any de minimis. Currently it's £135. If you import e-commerce products under £135, there's no UK customs duties on that importation. And that aligns with the US position, Donald Trump's policy of getting rid of the de minimis for e-commerce importations of packages into the US. And I remember when Donald Trump announced the cancellation of those duties. And I remember an uproar. I can uh remember various news items saying it's not a good idea. It's going to be administrative hell. And here we have an announcement by the UK government to essentially do exactly the same thing. And I can't find virtually anything in the news in the UK news. It seems sometimes the UK news is more interested in what happens in the US than what happens in the UK, and sometimes it can be more important. What I find absolutely astonishing is the implementation date for this in the UK is expected to be March 2029, or at the latest to March 2029. 2029. That's three years. I mean, a week is a long time in politics, but you know, three years. The government doesn't consider that it can actually implement this properly within a a shorter deadline for administrative purposes, a bit like Brexit, where putting in place procedures on importations led to serious problems. Have they learned from that or not corrected the issue? It is very, very surprising. I imagine there's been a bit of lobbying behind as well. The question as well is that the UK Chancellor promised not to raise taxes last year, but like most politicians that promise not to raise taxes, she did precisely the opposite in the budget. Remember George Bush in 1988 when he said read my lips, no new taxes, and then proceeded to do exactly the opposite as well. The UK Chancellor's between a rock and a hard place really. She's got she hasn't got enough money. She's got a sluggish economy. And she's chosen to raise taxes in a country that's already got a high tax take, a high debt, and a sluggish economy. So let let's see what happens. But I'm not too hopeful because it seems to me that raising taxes m I haven't gone into detail on the precise increases in taxes. And politics aside, it could be said that that sector of society is going to dump and demand. So I'm not exactly too hopeful because it seems to me that raising taxes resolves the problem in the short term and appeases the market so far. But it's likely to probably prolong the precise problem that the country's in. And that's not good for trade in general, let alone global trade. The UK needed to promote innovation. If anything, the UK budget was excellent at explaining new innovative ways to tax. To give you an example of one of these innovative measures, there's the new pay per mile levy for EV vehicles, electric vehicles. So in the UK, ordinarily cars pay an amount of tax per car during the year, irrespective of the mileage that the car does. And the new measure applies per mile EV levy of 3p per mile for EVs and 1.5p per mile for PHEVs. The measure will come into effect in mid-2028. At the annual test or the two-yearly test of the car or whatever, the garage will look at the mileage and then on the basis of the mileage difference between the last visit, they'll calculate the mileage of the car and then the tax will apply. But Andy Palmer, a commentator on EV policy, said that piling new costs on EV owners while keeping fossil fuel duty sends the wrong price signal. It rewards yesterday's technology and penalises tomorrow's. Where's the logic in that? Because a lot of car manufacturers, particularly in Europe, are facing certain difficulties with this electric vehicle transition. Like watching the UK budget. They're in the Houses of Parliament in London. They're all shouting, you can virtually can't hear the Chancellor speak. And traditions behind it. The Chancellor walks out of number 11 Downing Street, which incidentally is where the Chancellor of the Exchequer lives, next to number 10, where the Prime Minister lives, the neighbours. And she's got a red case, which is the red dispatch box. And in the UK, secret documents are put in a red box. I'll put a picture of her coming out of 11 Downing Street on the thumbnail so you can see it. But if you see someone walking down the street with a red box like that, you know they've got some some secret documents in it, which perhaps defeats the purpose a little bit. And you had increased defence spending announcements. The UK is set to spend 2.6% of GDP on defence by April 2027, as opposed to 2024-25. That's a lot less than Donald Trump was asking for. He was asking for 5%. But we are seeing European countries spending more and more and more. In fact, I predicted a few years ago that Europe would be going on a war footing, a war economy, and it's already happening. I think we should pay particular attention to what the UK is doing. I think we should be watching it closely. I think we should watch be watching those markets in order to determine the policies that they're implementing, are they working? And as a consequence, countries in a similar position should be using this to gauge their own responses to similar circumstances. And my coffee today is delicious, and the coffee beans are deliciously roasted and come from Colombia. So if I just have a drink of my coffee. It's an excellent example of how I'm profiting from global trade. If you're listening to this, then thank you for having listened to the podcast from beginning to end. The content of this podcast is intended only to provide an information resource of interest and does not constitute legal, tax, business, or financial advice of any kind. Should you require advice, then you should engage an appropriately qualified person to provide you specific advisory services in the field. The views, thoughts, and opinions expressed in this podcast are my own and do not necessarily represent the views, thoughts, or opinions of any law firm nor that of any third party, other person, company, or organization. Stay tuned for the next episode.