Radical? I've seen turnips that look more radical. There were times when I had to pinch myself. Was this really a socialist chancellor I was hearing? No. It was a New Labour Treasury Boss.
First the good news. Pep and Tessa contributions remain inviolate. Retention is a plus – £40bn or so sits in the Pep market, according to Autif. The total figure is certainly higher when you take into account direct investment through stockbroker schemes. On the face of it, selling your taxable asset will be less of a trial. Unfortunately, the devil really is in the detail so far as Budget statements are concerned. Inland Revenue press releases contain so much more than the Chancellor says these days. Talk about a puppet master.
Capital gains tax changes though will have an effect on investors. The effective ending of bed and breakfasting brings to a close one of the artificial tax savings measures that probably cost more than it saved in tax. Now, we have another base date for CGT – April 1963, 1982 and now 1998 – all become milestones in determining how much tax you might pay. It will be 10 years, though, before we have put indexation finally behind us, assuming a rising cost of living does not re-emerge as a problem.
Markets can hardly take exception to a Budget that might have been sponsored by Mogadon. Sterling will doubtless surge, for the same reason that equities will be nervous. Monetary, rather than fiscal, controls look flavour of the month. Equities will hardly be harmed by this.
I am confused. Soaking the rich now seems a distant memory. Tax fiddling is close to being outlawed. It's all down to picking the right investment again – how boring.
The Money Marketing Budget Panel comprised: Michael Bryant, non-executive director, Fraser Smith; Mark Howard, managing director, Maddison Monetary Management; Brian Lawless, managing director, Sun Life Technical Services; Iain Oliver, pension technical development manager, Commercial Union; Brian Tora, chairman, investment strategy committee, Greig Middleton; Tony Wickenden, partner, Technical Connection.