If you were chancellor, what would be in your Budget?
Today was scheduled to be the first Budget of Boris Johnson’s premiership. The chancellor announced the Budget last month, saying: “This is the right and responsible thing to do – we must get on with governing.”
Unfortunately, to misquote a phrase, the best-laid plans of chancellors and Prime Ministers often go awry. The Budget has now been delayed until after the General Election. But if it had gone ahead, what should Sajid Javid have included in his spending plans?
With Javid off on the campaign trail, CityAM has asked five financial and business experts what they would do if they were put in charge of the nation’s money for the day. Free from party politics and the election cycle, what policies do they think would turbocharge Britain’s economy?
Jo Gilbey, tax partner at BDO
As chancellor, I would look to take radical steps to boost the economy and help the UK thrive post-Brexit.
Simplifying and improving the tax system should be the key priority to help individuals and businesses succeed in this increasingly challenging environment.
First, I would merge national insurance contributions with income tax to simplify tax administration for employers and help level the playing field for personal service companies and gig economy workers.
I would also replace fuel duty and other motoring taxes with a mileage tax on all vehicles. Environmental efficiency would be incentivised by setting a zero tax rate for electric cars, meanwhile petrol and diesel vehicles would be levied at 100 per cent and 200 per cent of the cost per mile respectively.
Christian Faes, co-founder and chief executive of Lendinvest
Top of my list as chancellor would be to make changes to the way the government supports fintech which go beyond the superficial.
I’d make fintechs eligible for government-backed schemes such as the Enterprise Investment Scheme, and would instruct the British Business Bank – whose purpose it is to champion British businesses, after all – to make funding more readily available to financial services companies.
The fact that neither of these things are happening now puts UK fintech at a distinct disadvantage to fast-growth firms in other sectors. This is madness. London fintech alone has won $2bn of investment so far this year – it deserves better state-level support.
Once I’d sorted that, I’d head next door to 10 Downing Street and convince the Prime Minister to establish a Department for Technology. Without that, it’s going to get harder for the UK to stay as competitive in tech as EU countries which have already given the sector a seat at the cabinet table.
Pete Gladwell, head of public sector partnerships at LGIM
If I were chancellor, I would invest in local initiatives to reduce the burden on the social care system.
Household budgets are about saving as well as spending. When it comes to social care, it’s no different.
Early interventions can save taxpayers’ money and improve wellbeing. Prevention isn’t just better than cure; it’s better value too.
As our experience building homes in Salford shows, initiatives driven by local communities can effectively address fundamental issues around disconnection and disempowerment. And analysis of NHS data – on levels of GP visits, diabetes, obesity etc. – can help tailor local projects to combat loneliness and get people active again.
Prevention projects like this could be funded by allowing councils and combined authorities to keep a portion of the savings made to their social care budgets.
The upfront investment could come from the many in society who want to invest their pensions into initiatives that improve people’s lives, such as best-in-class retirement schemes. This creates a virtuous circle between saving social care costs and generating income to pay pensions.
Developing a sustainable social care framework would be a noble legacy for any chancellor.
Emma Jones, founder of Enterprise Nation
My priority as chancellor in these uncertain times would be to give entrepreneurs a fighting chance.
First, I’d issue Export Vouchers, which could be spent on a Brexit mentor to help guide entrepreneurs through their first global transactions.
Next, we all know that we’ve got to learn more to earn more. But for entrepreneurs, taking time out of their business and paying up-front fees can make training unlikely. As such, I’d bring in tax breaks for training, to be used for anything from digital to financial skills, or boosting profits through sales courses.
Finally, to prepare firms for the future of work and how to retain a workforce, I’d remove health insurance as a benefit from the P11D – the form that gives HMRC information about benefits you’ve received from your employer, apart from your salary.
Rather than being penalised as a taxable benefit, incentives such as health insurance are increasingly viewed as essential to ensure that your team remains in top condition, both mentally and physically. It’s a form of investing in your workforce, and it shouldn’t be taxed.
Bruce Dear, head of London real estate at Eversheds Sutherland
My Budget speech would tackle our two major religions – football and houses. I imagine I would begin with football:
“The Premier League is the world’s richest league, with annual revenues of over £4.8bn. Many of its clubs have their historic homes in the UK’s most deprived areas. Football’s money should come home.
“The Premier League clubs have agreed to put £100m a year into a new fund for the UK’s poorest areas. The government will match their money pound for pound for the first 10 years, creating a £2bn fund. As part of this deal, the clubs will be awarded a new national season ticket lottery and tax-free development zones around their grounds to create jobs and housing.
“The fund will invest in our most deprived areas to establish the services and support our most disadvantaged young people need: new purpose-built youth centres, highly-trained youth workers, health centres, education and counselling and grants for business startups. For the Premier League, £100m a year is small change; for Britain’s young people, it is a whole new world.
“Now let’s lasso a sacred cow that’s lived too long. Since 1980, council tenants have enjoyed the right to buy their homes at huge discounts. Lucky tenants have bagged big lottery wins, with average discounts of 44 per cent. Good for them, bad for the country.
“Right to Buy has been a poor-value privatisation of rent-producing public assets. It has damaged our ability to house poor and vulnerable people. Previous governments stopped Right to Buy receipts being used to build replacement council housing. The predictable result is a grave shortage of social housing, with well over one million people on waiting lists.
“And 40 per cent of ex-council houses are now owned by small private landlords. The rents they receive are indirectly paid by taxpayers through housing benefit. Our annual Housing Benefit bill is well over £20bn. Right to Buy has caused a mass social housing shortage, and turned the public sector from a rent collector into a rent payer.
“I am therefore abolishing Right to Buy in England – Scotland and Wales have already killed it. It will be replaced by a national crusade to build millions of high-tech, modular council houses.”
As I sit down, the Prime Minister will sack me over Right to Buy and my council house crusade. But he knows I’m right.