Part of the game at this time of year is to guess what the chancellor is thinking and what his intentions are leading up until the final budget next April according to the recent pre budget report.
Once the dust has settled and people stop taking such a reactive stance the professional sector will carefully analyse his proposal, before inevitably saving the day at the eleventh hour when they tell the government how much money they stand to lose in the long-term.
For example, the proposed changes to Capital Gains Tax has caused an outcry and made business asset holders nervous as they try to decide whether they sell their business now or see their tax increase from 10 % to 18 % of gains as well as losing out on the current annual indexation of assets based on inflation rates; the latter point is surely the act of bureaucrats and politicians who don’t understand the real commercial world!
Yet beyond the SME worries it’s clear that certain stakeholders, such as private shareholders in quoted stocks and shares, will be better off and see their tax fall.
The investment bankers must be breathing a sigh of relief, they must have expected worse.
The government has to recognise that for policy to be successfully integrated it needs to be phased in sensitively to avoid destabilising the economy and causing unnecessary worry to reactive interest groups. Worst of all it may disincentivise future entrepreneurs or encourage them to operate outside the UK.
The problem is that people become confused by a government which tends to contradict itself by attempting to build a thriving economy while impeding business development with their actions.