By Trevor Abrahmsohn, Glentree International
The UK Economy is £3trillion and the government have approximately £1trillion for spending. Yesterday’s budget had 1% to play around with – this doesn’t buy you many bunnies out of a hat!
Frankly, the Chancellor’s speech looked more a case of setting out his stall in readiness for an autumn election, than it was to change the world with his financial gymnastics.
Losing the tax breaks on the holiday lets facility will only affect a tiny proportion of the market.
Modifying the Non-Dom arrangement will help in the short term but after four years, all bets are off, and the wealthy international investors will no doubt find more attractive fiscal climates for their homes, i.e., Portugal, Italy, and Spain. It is paradoxical that these socialist countries have hurriedly organised a tax break for wealthy, displaced, Non-Dom’s from the UK, and are only too happy to receive their money and resources, if we are too stupid not to value them for ourselves.
In the post Brexit era, we should be encouraging inward investment, re-establishing VAT reclaim for tourists, dropping Corporation Tax and trying to make Britain the ‘Singapore on Thames’ instead of ‘pulling up the drawbridge’.
The small change to Capital Gains Tax is a tiny sop to the middle classes but this budget was less to do with the past and present six months trading, and more to do with trying to recoup some debt incurred during Covid and the energy crisis.
Unfortunately, with only £10billion to spread some cheer, how much could you expect in the circumstances?
There was nothing on changes to Inheritance Tax, extending Right-to-Buy or changes to Stamp Duty, which were long promised.
All in all, whatever the reasons for the mediocre offerings, this was a budget at the start of an electoral term and not one when you are trying to excite the Electorate to vote Conservative.
Although the Sunak/Hunt duo will never be inspirational, at least they are steady and dependable. But, I fear that these sustainable instincts are all fine and dandy but are simply not enough to turn the fortunes of the Tory Party, who are languishing with a 25% deficit against Labour.
The Tories will come to miss their electoral rock star, Boris Johnson, come the Election. Only when you lose something valuable, do you then cherish its worth!