View more on these topics

Boxing clever

The world seems to have stopped for everything other than war. We have entered new political territory, with the Tories more likely to man the barricades than most of Tony Blair&#39s own troops.

The announcement that the Budget will again take place in April makes some sense in terms of strategic planning on the battlefield but will not help the strategic planning of most financial planners right now.

Last year, the Budget was also put back until April following the tragic events that led to Chancellor Gordon Brown&#39s absence from the Treasury in January. So, this will be the second year that the Budget has been delayed significantly – at a time when consumers and financial providers are looking for some real Government action on a raft of issues, including pensions, tax credits on Isas and insurance company solvency.

Meanwhile, financial services businesses are making no new product plans and investors continue to sit on their hands.

This is more than unfortunate. At the end of January, the FSA highlighted a number of risks associated with depressed markets. Managing director Carol Sergeant said: “The year ahead should be one of modest recovery but there are considerable uncertainties and plenty of reasons for caution at a time when consumers look financially stretched and some sectors have seen their profitability and capital reserves reduce markedly.”

That statement from the FSA indicated a degree of considerable concern. Moreover, a continued progression towards war has done nothing other than ensure there is stasis in the reactions of financial markets as well as consumers.

What is called for is clear. November&#39s pre-Budget report indicated the major ideas. The Chancellor posted his thinking on reduced growth rates. He articulated the need to borrow. He even talked about the development of savings policies, with signals that the child trust fund is being developed cautiously over the coming months.

Much of the detail from the November statement is now being developed by officials at the Treasury, Inland Revenue, Customs & Excise and the FSA.

As I remember, it was Norman Lamont, the then Conservative Chancellor, who developed the idea of a Green Budget in the early 1990s. The event has moved on considerably since then to become a detailed statement of economic prospects and a clear indication of policy.

So, the question must be put – do we still need a March Budget? Is there any need for anything other than a series of operational statements or orders laid before both Houses of Parliament?

Sure, the traditional Budget is a Parliamentary event that has become firmly fixed in the nation&#39s gaze. However, there is now significant precedent for abandoning the ritual.

Since the beginning of this year, Leader of the House Robin Cook has implemented a new Parliamentary schedule that has met with much internal debate. MPs either love or hate Parliamentary sessions which begin at 9.30am and end in the early evening. Some believe outside careers help form more rounded political views, offering the legislature a sense of the professions, commerce and other wider interests – a view which I share.

But let&#39s face it, the mystery of the annual Budget box is becoming less of a surprise every year. Such is the nature of modern politics that much of the contents of Brown&#39s shiny new despatch box are already market-tested in the financial pages weeks in advance of the Budget speech.

As far as the Inland Revenue and Customs and Excise are concerned, many of the traditional moves on individual and corporate taxation could be announced in a simple statement.

Overall, it makes sense in terms of financial planning for the pre-Budget report in November to become the main Budget statement. The Chancellor can still parade his team and his shiny red box but also give financial planners, both personal and corporate, the opportunity to plan sensibly before the end of the tax year.

But uncertainty remains. Of course, the Chancellor has said there is virtually an open chequebook for the war in Iraq. He said: “The international community must not stand by while a regime that proliferates weapons of mass destruction defies more than a decade&#39s international agreements.”

Given lower growth and the consequent need to borrow, this is having a significant effect on the public purse and, therefore, many of Brown&#39s calculations must be in constant flux.

However, there is a danger that while we remain in a state of stasis on policy, individuals and business will continue to delay decisions and market drift will intensify.

Let us move the Budget once and for all to November. You never know, having just one Budget a year might even save the taxpayer some money. Now that would be prudence.

Iain Anderson is a director and chief corporate counsel at Cicero Consulting


House prices still strong, says Halifax

The average UK house price increased by 1.7 per cent in February to £125,558 from £123,422 in January, according to the latest Halifax house price index.Halifax says this is a sign that the market remains strong, with February&#39s increase representing a 23 per cent jump from £101,708 in February 2002.The bank says it is still […]

South African fund manager strengthens UK team

South African manager of managers Io Investors has announced the appointment of a new chief investment officer and three business development staff in an effort to boost its UK market share. The company, which is the international asset arm of South African financial services group Sanlam, has announced the appointment of Deon Gouws as chief […]

Transact adds offshore bond to range

Wrap provider Transact is adding an offshore bond facility to its wealth management wrapper range which already covers Peps, Isas and pensions. The offshore bond wrap gives investors the benefits of the Isle of Man tax regime for life products. Annual charges are 0.2 per cent to 0.6 per cent, depending on portfolio size.

57% see emergence of European super-regulator

Most IFAs believe they will be under the jurisdiction of a European super-regulator for financial services within five years.The State of the Nation poll found that 57 per cent of IFAs believe that UK financial services would be controlled by a European authority by 2008 but 40 per cent were not convinced this would happen […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm