In recent weeks it's been muted in the press that "Philip
Hammond's survival depends on the success of his Autumn Budget".
needs a successful Budget. It would seem that the hardline Brexiteers are out to
get him, not because of his stewardship of the economy, but because he is a
realist pursuing a soft Brexit to cushion its impact.
agrees, in theory, but practice may prove different. She is being urged by
allies to carry out a Cabinet reshuffle and if his Budget causes a widely
negative reaction like his first one in March, May will be under pressure to
oust him in order to placate her Europhobic back-benchers.
already been a lot of pressure from senior figures at the top of Government to
create “face saving” measures in the forthcoming Budget.
“This Budget needs to capture the imaginations of the
One of our guests felt that this budget should not rock the
boat, but was needed to give certainty. The feeling amongst our CFO guests was
that they were all fed up with reading about what may or may not happen.
Moving on from this, it was agreed that in addition to certainty, clarity was
needed. The main hurdle facing the country is Brexit. We need to get through
this first and foremost. We need a vision of the future.
The upside of
the disastrous Conservative performance in the general election, is that we now
have a government that is being held to account by a stronger opposition.
“The shock election result was good for democracy as it led to
a government that has to justify everything that it does”
report said that the Chancellor wants to “restack the deck for the next
generation”. In other words, he wants to increase tax on the older generation to
fund tax breaks for the younger people. This 'tax on age' was seen as too
simplistic, pitting one generation against another, and politically very
“People would be more willing to pay more taxes
if they felt the money was being spent wisely”
One CFO was feeling
particularly despondent. They felt that on the current course, with all the
in-fighting going on in government that the eye has been taken off the ball. Too
much talk is about “knee-gate”. He felt that the Chancellor would create a
political budget to save his own skin and therefore, he may come up with
gimmicks to counteract Corbyn, such as freebies for students. This would be a
disaster. As a country we seem incapable of moving on from Brexit and getting it
done. It's like a Shakespearean tragedy. We have all seen this movie before.
“In order for this budget to work, it should be 'steady as she
goes' but with a few baubles left on the Christmas tree”
Chancellor aim to win the younger generation? The student contingent have been
busy signing up to follow Corbyn at their university Fresher's Fairs.
People need to be reminded of how the economy was in the 70s. The populous
have short memories or little experience of this. May and Hammond are ineloquent
at getting the message across to the people. There seems to be a destabilised
Conservative Party, with lots of infighting. There needs to be clear
communication about what the Conservatives stand for and what the Labour party
might lead the country into if in power.
Another guest felt that this
communication has to be done in “Sweets and Soundbites” as this is how it works
in the modern world. A great example of how this works was Corbyn's promise to
abolish student university fees.
“It is not the first time
that a government has seen people's retirement savings as low hanging fruit to
help bolster its coffers”
Again to help bring the younger generation over
to the side of the government and to promote “inter-generational fairness”,
there are reports that the Chancellor could scrap stamp duty for first-time
buyers. In addition, it looks like he is set to give over £10 billion to boost
the “Help to Buy” scheme. This might boost the house building industry, but
would have a serious effect on the new regulations that the Conservative
Conference promised to look at for the Green Belt.
In addition to the
younger generation, the budget should woo the quiet majority of Middle Britain
who are looking for regional investment and support to help the High Street
As we are an open market, investment in the UK is needed right
now without delay, to stimulate lending to SME businesses like retailers and
making inward investment into the UK as attractive as possible.
to this, The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment
Scheme (SEIS) have both been placed under review this year. The EIS has been a
useful source of finance for start-ups, however, it is also seen as a way for
the wealthy to avoid tax. It has been predicted by one of the large tax and
audit firms, that the tax relief could be reduced from 30% to 20%.
“Brexit means Brexit but this still doesn't actually mean
anything. We need to know exactly what Brexit does mean”
Not enough is
being addressed with regards to productivity. There needs to be something in the
budget to create a productive environment. This issue is exacerbated by the gap
in salary between the high and the lower paid workers. The UK is slipping and
other countries within Europe are doing better than we are.
guests pointed out that the budget needs to be kept simple. Over the years there
has been a lot of complexity added. One example of this is the Apprenticeship
Levy. In principle, the idea is a good one, however, it appears confusing to the
“He should look at three clear messages that
are believable and make it simple”
It is necessary to work on the
fundamental issues. Tinkering around the edges will only make things worse.
There is too much political gamesmanship, so the budget could end up
pandering to a small political group. One particular CFO stated that he is
looking for an apolitical budget another important subject that was brought up
was the workforce. The government needs to focus on Graduate employment and
investments in technical colleges for those who do not go to university. This
would increase our productivity and the competitiveness of our workforce,
especially in light of Brexit. Again clarity was called for over the movement of
products and people after Brexit.
The CFO from a global IT company
suggested that as the USA draws back from its global leadership role, there is
an opportunity for the UK to fill some of the void and this should be to our
advantage, but we need a niche, something we are really good at like
The UK has some of the finest education institutions in the
World. We can now take the lead with other aspects such as the climate debate.
There is also scope and upside for the UK to continue to act as the bridge into
leaders want the government to stop the in-fighting, put knee-gate to one side
and focus on delivering a strong budget to bring stability to the country and
create a solid platform for economic growth.