They used to say that a week was a long time in politics, but, following the shambolic events surrounding this year’s Budget, I think we can shorten that period considerably.
The Chancellor had hardly sat down before elements of his carefully crafted Budget proposals started to unravel. I believe it delivered some very significant benefits to savers, entrepreneurs and financial advisers.
Its Achilles’ heel was that while doing more for these groups, it tightened the screw on the disadvantaged, particularly the disabled. This contrast was so extreme that the initial rumblings of discontent from Tory backbenchers quickly grew into real anger and was ultimately topped off by the resignation of a key Cabinet minister.
This astonishing turn of events was then followed by the brilliant news that the proposals for the disabled had been dropped. It is a credit to the Government that it climbed down so quickly, as George Osborne and others went into damage limitation mode.
Ignoring the shambles, the reality is that from the perspective of a financial adviser, this year’s Budget is outstandingly positive. A number of important new incentives to save and invest have been introduced, including substantially raising the Isa limit to £20,000 and launching a completely new bonus driven Lifetime Isa.
Add to that the fact that nothing was taken away, not even the much heralded abolition of higher-rate tax relief on pension contributions, and it is clear that this was a wonderful Budget for savers.
More than this, it was also a Budget for SMEs, with reductions in business rates and, by 2020, the promise of a significant and unexpected cut in the corporation tax rate, bringing it down to 17 per cent. So a good Budget for savers and strivers.
Mr Osborne also surprised us all with a series of dramatic and unexpected wins for entrepreneurs.
The Chancellor announced that not only was he cutting capital gains tax (CGT) to 20 per cent but, as if that were not attractive enough, he is quite remarkably introducing the added bonus of a new 10 per cent CGT rate for entrepreneurs regardless of the size of their shareholding.
It is clear to me that each of these changes create financial planning opportunities for our clients and reinforces the overall need, and indeed, the demand for financial advice.
Whatever its failings in other areas, I believe that this Budget will in time, be seen as delivering outstanding benefits for the country’s savers and entrepreneurs, all of whom are our natural clients and will need good quality financial advice to help them achieve their objectives.
Ken Davy is chairman of SimplyBiz Group