ChatGPT’s Budget Prediction: The Most Disciplined Thinker in the Room

Over the past two weeks I have been running a Budget prediction experiment to show SME leaders what modern AI can really do when you treat it like an analyst rather than a quick helper. I gave four leading models the same ten page research brief and asked them to predict what Rachel Reeves is most likely to announce in the upcoming Budget. Each model then produced a full long form analysis followed by a public facing summary.

If you are joining part way through this series, each post stands on its own. You will see how one model approached the challenge and how its thinking compares with the others. The goal is simple. To show the depth AI can reach, how differently each system reasons and how powerful multi model comparison becomes when you use it properly.

ChatGPT is the most structured thinker of the four models. It behaves like a disciplined analyst. It breaks problems into steps, builds arguments logically and tests its own assumptions. Many SME leaders only use ChatGPT for drafting, so they have no idea it can operate at this level when given a deep brief. This post shows what happens when you ask ChatGPT to think rather than write.

Reeves’s Red Box Reality: Stealth Taxes, Green Bets And A Nation Asked To Swallow The Hard Steps

What surprised me most about ChatGPT’s analysis was how quickly it locked onto the big structural story of this Budget. Before it even listed predictions, it built a clear narrative around Reeves being boxed in by weak growth, debt pressure and the self-imposed pledge not to touch headline tax rates. Most SME leaders think of ChatGPT as a drafting tool. This is the kind of strategic framing you would expect from a Treasury analyst, not a language model.

It also took a very deliberate risk.

ChatGPT leaned heavily on the idea that Reeves would rely almost entirely on stealth taxation rather than visible rate changes. It treated the threshold freeze as the political centrepiece and assumed everything else would be built around it. That is a big assumption, and yet the reasoning behind it was solid: historic precedent, political cost, polling and OBR language all pointed in that direction.

That kind of structured judgement is exactly what SMEs never see when they only ask AI for shortcuts or admin tasks.

Now here is the summary ChatGPT produced after completing the full research brief.

Top 10 changes she is likely to make, and how visible they will be

High: Income tax thresholds frozen until 2030
Reeves is set to lean heavily on fiscal drag rather than headline rate rises, extending the freeze on personal allowances and higher rate thresholds out to the end of the decade. That quietly pulls millions more workers into tax and higher bands as pay rises chase past inflation. This is classic front page of the speech material because it affects almost every earner in the country and becomes the defining proof that “we will all have to contribute”.

High: Fuel duty pushed up after the long freeze
After more than a decade of political cowardice on fuel duty, Reeves looks ready to reinstate the annual uprating and scrap the temporary 5p cut. Pump prices will edge up, and the cost will ripple through transport, logistics and everyday motoring. It will be sold as unavoidable and environmentally responsible, but the politics are brutal, so expect it to be flagged early in the speech and then wrapped in talk of green transition and road investment.

High: New National Insurance bite on rental income
One of the clearest “fairness” moves is to drag landlords into the National Insurance net so rental profits look more like earned income. That is a direct tax rise on property investors and accidental landlords who have benefitted from preferential treatment for years. It will be billed as closing a loophole rather than punishing aspiration, but it is still front page of the speech territory because it hits a vocal and politically engaged group and will feed into the rent debate.

High: Road charging for electric vehicles from 2028
The honeymoon for electric car owners is ending. Reeves is preparing per mile road charges or equivalent for EVs from the late 2020s, explicitly to replace falling fuel duty. It will be presented as a modern, technology led way of paying for roads rather than a green penalty. This goes to the core question of how to fund the state as we decarbonise, so it will be highlighted as a big structural change even if the real pain is deferred.

High: Capital gains and dividend tax squeezed further
Wealthier investors and small company owners can expect higher effective tax on investment returns, through higher rates at the top and smaller allowances for gains and dividends. This is the ideological heart of Reeves’s “broadest shoulders” argument and a critical revenue source that does not touch headline income tax rates. It is likely to feature clearly in the speech as a visible sign that the better off are paying more, even if the detail ends up in the small print.

Medium: Mansion style property levies on high value homes
Rather than a simple annual mansion tax, Reeves is likely to use a mix of higher stamp duty at the top end, trial annual charges for very expensive properties and a gradual shift towards more proportional property taxation. This mainly hits owners of multi million pound homes, especially in London and the South East. It is politically sensitive but numerically narrow, so it will probably be described in careful terms, able to sneak into the small print while still signalling that prime property is no longer a safe tax shelter.

Medium: Tightening of pension tax perks for higher earners
The Chancellor is poised to trim back the more generous pension tax reliefs enjoyed by higher earners and those who have used salary sacrifice aggressively. That raises money from people with the capacity to save while avoiding a direct assault on the basic structure of the pensions system. It is technically dense and easy to bury, so expect it to sit in the middle of the pack: important for specialists, low visibility for most voters, and presented as tidying up an unfair system rather than a raid on retirement.

Medium: Abolition of non dom status and closing carried interest loopholes
Labour’s long trailed abolition of non domiciled tax status and the move to tax private equity carried interest as ordinary income rather than cheap capital gains are virtually certain. They bring in modest sums but carry huge symbolic weight about fairness and everyone paying tax where they live. The headline line about “no more non doms” will be in the front section of the speech, but the mechanics of trusts and fund structures will be left to the small print.

Medium: Big public investment push through Great British Energy and infrastructure
Reeves wants to offset the story of higher taxes with a story of national renewal, so she will lean heavily on billions of pounds for Great British Energy, grid upgrades, housing, transport and digital infrastructure. This is central to Labour’s economic mission and will be framed as the payoff for today’s pain. The headline announcement will be front page of the speech, but the multi year profiles, regional allocations and delivery mechanisms will quietly live in the annexes.

Low: Exotic levies such as exit taxes kept in the drawer for now
Some of the more radical ideas that have been floated, such as a formal “exit tax” on wealthy people moving abroad or sweeping new sin taxes, look unlikely to appear in this budget. They may be signalled as areas for consultation, but the political and market risk is high. If they appear at all they will be buried deep in the Red Book as long grass options, rather than centre stage policy.

Budget 2025 research summary

Rachel Reeves walks into this budget boxed in by weak growth, stubborn debt and a self imposed promise not to touch the main rates of income tax, National Insurance and VAT. The Office for Budget Responsibility has warned of a large gap between Labour’s rules and reality, leaving the Chancellor with three levers: cut spending, raise less visible taxes or abandon her own targets. She has chosen to keep the debt rule intact, avoid a visible return to austerity and lean hard on stealthier forms of taxation instead.

The tax story runs through almost every part of the package. By freezing income tax thresholds for years to come, Reeves pulls more people into tax and into higher bands each time wages move up. On top of that, she tightens the tax net around wealth, property and investment income. Landlords will start paying National Insurance on rental profits. Owners of expensive homes will face higher tax on sale and potentially new annual charges. Capital gains and dividend allowances are cut again and top rates nudged upwards. Non dom status is abolished, offshore trusts and carried interest loopholes are closed, and road charging for electric vehicles is introduced to replace disappearing fuel duty. Formally, the headline income tax rates do not move. In practice, the tax burden rises across the income distribution, with richer households paying more in cash terms but ordinary workers noticing their pay packets do not go as far as they thought.

Reeves pairs this with a conscious decision not to repeat the hard cuts of the 2010s. Benefits and the state pension are uplifted in line with inflation, with the triple lock intact, providing one of the largest cash rises for pensioners in the history of the system. Universal Credit and other key benefits are protected from real terms cuts, even if there is no generosity beyond that. Labour leaves some Conservative era restraints in place, such as the two child limit, because the fiscal room to reverse everything simply does not exist. Working families get modest help through an expansion of free childcare and universal primary school breakfast clubs, policies which smooth daily life and trim costs but do not transform household finances overnight. There are no repeat blanket energy bill cheques, signalling that emergency cost of living support is ending as inflation recedes.

On public services, the Budget offers stability rather than transformation. The NHS, schools and policing receive small real terms increases that stop further decline and allow ministers to claim a break with austerity. Capital spending is pushed up more aggressively, with a deliberate shift towards long term investment in hospitals, classrooms, transport networks and digital infrastructure. Great British Energy is launched with billions in seed funding for renewable and nuclear projects, aimed at cutting bills, strengthening energy security and creating jobs. The detail of these programmes is complex and the benefits will take years to materialise, but the direction is clear: this is a government trying to rebuild the productive base of the country while holding the line on the deficit.

Pay deals agreed to end waves of strikes have left departmental budgets tight. The Treasury has told departments that future pay awards must largely be funded from existing settlements. That means hiring freezes, re prioritisation and productivity drives in many parts of the public sector. Nurses, teachers and other staff are better paid than they were, but often working in teams that feel stretched and under resourced. Reeves talks about public service reform through prevention, integration and local leadership, but with limited extra cash the test will be whether services can do more than stabilise after years of pressure.

From a business and investor perspective, the Budget is more stick than carrot in the short term. The corporation tax rate remains high by UK standards and reliefs are trimmed at the edge. Large partnerships in professional services lose some of their tax advantages. Banks and energy companies see no major new windfalls but also no big giveaways. At the same time, full expensing of investment is sustained, and there is a clear pipeline of public projects in green energy, infrastructure and regional growth where private capital will be invited in. Reeves is betting that firms will accept higher taxes now in exchange for macro stability, better infrastructure and a more predictable policy environment after the chaos of recent years.

The distributional impact is complicated. Pensioners are broadly protected. Low income households avoid new cuts but continue to feel the grind of high prices and rents. The squeezed middle bear much of the quiet tax rise through threshold freezes, higher fuel duty and a lack of targeted support. Landlords, higher rate taxpayers and owners of large portfolios shoulder more of the explicit burden. Regional policy leans towards further devolution, targeted regeneration funds for towns and cities outside London and using the green transition to seed jobs in industrial and coastal areas. Rural communities are caught between higher motoring costs and promises of better broadband and modest support for agriculture that may not come fast enough to offset rising pressures.

Politically, the package is a high risk attempt to reconcile Labour’s pledge to be “pro worker and pro business” with the arithmetic of an ageing population and a weak productivity record. Reeves avoids a headline breach of the central manifesto commitment on main tax rates, but she does test its spirit. Voters who heard that taxes would not go up for “working people” will notice that, functionally, they are paying more. The Chancellor is gambling that people will swallow this if the economy is calmer, public services stop deteriorating and there is a credible story of long term renewal to point to in a couple of years’ time. If growth and living standards pick up before the next election, she will argue the pain was worth it. If they do not, this budget will look like an early step on the road to political trouble.

Strictly Budget Happiness Scale

On the Strictly Budget Happiness Scale, this Budget comes in at 6 Respectable Routine.

In Strictly terms, Reeves has walked out, hit her marks and delivered the choreography she promised the judges in rehearsal, but she has done it with a fixed grin and a lot of weight on her shoulders. Technically, she keeps the big manifesto promise not to raise the main rates of income tax, National Insurance or VAT, and she delivers on headline pledges such as scrapping non dom status, backing Great British Energy and protecting the pension triple lock. That keeps her out of the “Total Dis-ah-ster, Darling” end of the scoreboard.

But the routine is held back by the sense that the spirit of some campaign lines has been bent out of shape. Voters heard repeated assurances that “working people” would not face tax rises, then discover that frozen thresholds, higher fuel duty and tighter capital and property taxes leave them noticeably worse off. The letter of the manifesto may survive, but the trust account is being drawn down, and that drags the score down a notch. The tax changes feel more like compulsory group choreography than a crowd pleasing show dance.

There are moments of genuine flair. The scale of the green investment, the clear attempt to use public capital to unlock private money, and the decision to avoid a fresh round of across the board cuts all give the routine shape and ambition. Parents will feel the benefit of childcare help and school breakfast clubs. Pensioners will quietly cheer a big uplift in the state pension. Those touches keep this away from the lower rungs of the leaderboard.

Equally, there are obvious missteps. The Budget offers little immediate relief to the squeezed middle. It asks motorists, landlords and investors to pay more without offering much sugar to help the medicine go down. There is no big signature move that makes the audience gasp and forget the pain. As a result, the public reaction is likely to be muted, bordering on grumpy. People may respect the effort rather than love the outcome.

So this is not Glitterball Glory Deluxe and it is not Cha Cha Chaos either. It is a solid circuit of the floor, a routine the judges mark in the upper middle of the pack. Plenty of content, clear intent, but not enough joy in the room to justify a higher paddle.

Strictly Political Survival Scale

On the Strictly Political Survival Scale, the Chancellor currently sits at 7 Craig: A solid performance… mostly.

Right now Reeves enjoys the authority that comes with being the first Labour Chancellor in years and the perception, in Westminster at least, that she is serious about fixing the public finances. Markets have not punished her. International observers are reassured by her commitment to debt rules. Inside the party, she has delivered on enough core promises and avoided the kind of wild misstep that topples a Chancellor in their first act. That base of credibility gives her a decent starting score.

This Budget will dent her popularity with parts of the electorate. Stealth taxes, higher motoring costs and tighter treatment of investment income are the kind of measures that show up slowly in bank statements and quickly in opinion polls. Some Labour voters who hoped for a more generous break with the Conservative past will feel short changed. Swing voters may not yet see clear improvements in their local services to justify the extra tax they pay. The judges in the press gallery will be tempted to reach for the sharper comments.

Even so, the politics of survival are on her side in the short run. There is no obvious rival ready to move against her. The Prime Minister is locked in behind the fiscal strategy and cannot disown it without disowning his whole programme. Backbench unrest will rumble, especially on welfare and housing, but it is unlikely to crystallise into a serious push to remove the Chancellor unless the markets turn or the polls collapse. The more realistic danger is a slow erosion of goodwill rather than a sudden exit from the show.

Looking ahead to the year after this Budget, Reeves’s position depends on two things: whether the economic data starts to move in her favour and whether voters feel any improvement in their daily lives. If inflation continues to fall, if interest rate cuts come through, and if even modest visible gains emerge in the NHS, schools and local investment, she will be able to argue that the unpopular choices were necessary and are working. In that scenario, her survival prospects improve and the score edges towards Anton’s praise.

If, on the other hand, growth stalls, living standards flatline and the only thing people notice is higher tax on shrinking pay, the routine will start to look tired. Party patience will shorten, and the question of whether someone else should lead the economic line into the next election will move from whispered speculation to open debate.

For now, though, she is not in the dance off. She keeps her place in the competition with a respectable, if hardly show stopping, performance. A solid 7, with the promise that the judges will expect something more dazzling next series if she wants to hold on to the job and, eventually, reach for the political Glitterball.

When you compare all four models, ChatGPT stands out for one reason.

It is the most disciplined thinker in the group. It does not wander. It does not get distracted by noise. It builds a structured argument, tests its own assumptions and stays logically consistent from start to finish.

Claude will give you nuance.

Gemini will give you macro logic.

Perplexity will give you breadth.

But ChatGPT is the model that behaves most like a senior analyst building a case.

If your business made decisions with this level of structure, you would already be ahead of most competitors. This is what happens when you stop treating AI like a quick helper and start using it as a thinking partner.

Next time we will look at how Claude approached the same challenge with a completely different analytical style.