'David throwing pebbles at Goliath' - 15 top Budget quotes
Fit for the future
With little room to manoeuvre against the Brexit backdrop, it was not surprising the Autumn Budget was somewhat dull in comparison to some of the more recent ones.
Chancellor Philip Hammond's predicament was illustrated at the start of his statement to the House of Commons, when he revealed the government would be putting aside a further
£3 billion for Brexit, which he accompanied with news of an economic growth downgrade.
However, there were still some significant measures, with the plan to
scrap stamp duty for property purchases up to £300k for first time buyers dominating the headlines.
There was also some
big news for Enterprise Investment Schemes and Venture Capital Trusts as the government unveiled the results of its Patient Capital Review.
Hammond vowed that this was a Budget to get the Britain 'fit for the future'.
Here's what 15 leading figures in the wealth and fund community thought...
Lucy O’Carroll, chief economist, Aberdeen Standard Investments
'Mr Hammond is like David throwing pebbles at the Goliath of the productivity and growth challenges that the UK faces after Brexit.
Today could have been a golden opportunity to take a distinct, long-term view of the UK’s prospects, tackling the country’s productivity performance head on. An expanding economy would underpin confidence, spending and tax revenues, ultimately benefitting the public finances.
'Unfortunately, the Chancellor lacks the political capital to take such a dynamic approach, and his cautious nature means he has probably barely considered it. In the process, he has missed the opportunity turn an evolutionary Budget into a revolutionary one.'
Abi Oladimeji, chief investment officer, Thomas Miller Investment
'If the OBR’s latest estimates on GDP growth rate and the labour market are correct, the next few years would bring a combination of weakening economic growth and rising unemployment. The government may find itself with a lot less room for manoeuvre.'
Justin Urquhart Stewart, co founder and head of corporate development, Seven Investment Management
'Most generations have had their challenges; from the hyperinflation of the 1970s and the three day week, through to the double digit mortgage rates of the 1980s. In the 1990s, we saw the UK crash out of the ERM, a fall in sterling and the only fall in house prices outside of the global financial crisis since the data begins.
'But today’s struggles are unique because of the stark intergenerational differences. Sky high house prices disproportionately affect the young, as do the uncertainties around Brexit in the long-run, which is increasingly becoming a dragging sea anchor.
'So the scrapping of stamp duty for first time buyers has to be welcomed, although for the wealthier it may well be the Bank of Mum and Dad, already apparently Britain’s ninth largest mortgage lender, who may benefit the most.'
Svenja Keller, head of wealth planning, Killik & Co
‘We wonder how much impact doubling the allowance for EIS tax relief will have in practice for the majority of investors.
For example, an investor would require an income tax bill of £600,000 in order to receive 30% income tax relief on a £2 million investment. This seems excessive when the £1 million allowance was already quite generous.
Neil Woodford, head of investment management, Woodford Investment Management
‘The new £2.5 billion investment fund announced in the Budget will be transformational for Britain’s economic future. The ability to access capital is profoundly important to these businesses and the significant improvement in the amount available will help young, knowledge-intensive British businesses to scale-up.'
Richard Buxton, head of UK equities, Old Mutual Global Investors
'From an investment perspective, my view is that this Budget changes very little. Hammond may have used a little sleight of hand to give himself a little headroom at this juncture.
'In practice, however, he appears to have kept the vast majority of his powder dry, cognisant that there may well be a time, as Brexit approaches, when more radical action is merited.
'In the meantime, and notwithstanding the chancellor’s desire to “show the nation a good time,” those hoping to speed off into a glorious sunset may want to leave their driving apparel in the glovebox just a little longer.'
Nancy Curtin, chief investment officer, Close Brothers Asset Management
'In reality, Philip Hammond had little room to manoeuvre, boxed in by a combination of his fiscal rules and Brexit uncertainty. But he used what wriggle room he had well, spending wisely.
Prioritising infrastructure, technology and digital innovation is vital towards building a more modern and balanced economy, and tackling the productivity gap.
Productivity is currently an albatross around the neck of the economy, as it is in many countries, holding back growth. The chancellor couldn’t afford to throw the kitchen sink at the problem but today’s measures mark a significant step forwards for the economy.'
Colin Morton, manager Franklin UK Equity Income fund, Franklin Templeton
'The chancellor has delivered a relatively political Budget that was short of surprises, but dominated by the significant and substantial downgrades in economic growth by the OBR, driven primarily by the lack of productivity. This drop in growth expectations for every year to 2021 has taken Britain’s development well below the consensus of economists predictions.
'What’s clear is that inflation is on its way back down towards target levels, which reinforces the view that interest rates will not be rising at any great pace in the near future.
'This environment is likely to provide ongoing support for the UK equity market as, in the absence of any credible alternatives and with bond yields languishing at low levels, they will continue to underpin the market.'
Jason Hollands, managing director, Tilney
'The devil is always in the detail and in respect of VCTs, proposals announced alongside the Budget aim to tackle VCTs adopting lower risk capital preservation strategies rather than ploughing cash into genuine, growth companies to help them expand.
'The government understandably wants these tax-aided schemes to be used for incentivising genuine risk-capital into younger companies that can generate jobs and prosperity, not for enabling someone to get a nice tax break for investing things like crematoria maintenance contracts with local authorities.'
Simon Blowey, director of financial planning, Brewin Dolphin
'"‘Gag-a-minute’ Hammond tried to show the human not ‘spread-sheet’ side of his character with this Budget delivery.
‘We were relieved that the chancellor resisted the temptation to make major changes to the pension system, keeping the annual allowance at £40,000, encouraging people to save adequately for their futures. The lifetime allowance will increase in line with inflation from £1m to £1,030,000 on April 6 next year and this is a blessed relief after the constant tinkering with the pension system that has gone before.
'There was a drum-roll like expectation before, during and at point of his important delivery for first time buyers and housebuilders - Hammond's house promise delivery. The abolition of Stamp Duty is a response to the recent election’s ‘Canterbury kids’ in a bid to turn them back from Labour, as well as a centrist fillip for aspirational professionals'.
James Gladstone, head of wealth planning, Cazenove Capital
'Increased qualification criteria for companies and funds wishing to secure VCT and EIS reliefs, outlined in the Budget papers, will likely reduce the availability of these investments and ensure that only those with the highest capacity for risk end up taking advantage of this tax break.
'The 30% income tax relief on offer remains in place but the change only offers relief to companies where there is a significant risk of loss of capital that is in excess of the tax advantage available. This will help ensure that investors do not confuse these high-risk schemes with being a pension alternative.'
Richard Carter, head of fixed interest research, Quilter Cheviot
'Ultimately, we expect this Budget to have a bigger impact politically than it will on the economy – in fact, there was precious little in the budget for investors and markets have mostly responded with a collective shrug.
'The key issue facing the economy is obviously Brexit and the challenge for the government is to try and break the talks with the EU out of their current impasse. Until there is more certainty on this front, we expect the UK to continue to lag behind other leading economies, particularly Europe and the US.'
John Husselbee, head of muti-asset, Liontrust Asset Management
'Amid some headline-grabbing measures on stamp duty and driverless cars, this looks a fairly thin Budget that characterises a government without a strong mandate.
'With obvious concerns about getting proposals through the House, anything radical was always unlikely from chancellor Philip Hammond and there is nothing in today’s speech that would encourage me to consider any shift in tactical asset allocation.'
Jonathan Barber, UK Equities portfolio manager, Columbia Threadneedle
'We have been seeing some share prices come under pressure as the chance of a Corbyn-led Labour government in power has increased, however the chancellor’s Budget seems well received which may be positive for these companies, although at the margin.
'We remain constructive on opportunities in UK equities – UK plcs are trading at a discount to geographical peers and as active investors we believe that it is possible to find attractively valued UK companies which have the ability to provide good returns despite the domestic macroeconomic headwinds.'
Azad Zangana, senior european economist, Schroders
‘Overall, this was not the bold, game-changing Budget that many in chancellor’s own party were demanding. However, the chancellor's giveaways may just about be enough to satisfy the headline writers, and keep him in his job for now.’