The second Budget of 2021 did not spring too many surprises for IFA clients but the bad news had already come in early in the year.
The Autumn Budget 2021 largely left various reliefs untouched though as advisers will note many thresholds notably for income tax, inheritance tax and the pensions lifetime limit are frozen till 2026, a freeze announced in March.
Much of the Budget debate has focused on the growing tax burden amid concerns about growth once the post-pandemic recovery has come out of the figures. The IFS and the Resolution Foundation arguably have the best analysis.
To quote the IFS on the tax position, it said: “This is the year when a Conservative Chancellor raised taxes by £40 billion or so; when the tax burden was put firmly on a path to exceed 36% of national income and hence settle at a record sustained level, a full 2.7 per cent of GDP higher than it was in 2019-20; and when public spending was increased across the board to take the size of the state back to levels not seen in normal times since the days of Geoffrey Howe.”
The Resolution Foundation bleak assessment of wages was as follows -
“Real wages are set to fall again next year, while the medium-term outlook for steady state real wage growth at the end of the forecast period is just 1.5 per cent (down from 2.5 per cent in 2010). This is particularly troubling, given the UK is still in the midst of its weakest decade for pay growth since the 1930s.”
In news related to the Budget, Baroness Altmann has called on her fellow peers to block the suspension of the triple lock. Altmann says the Office for Budget Responsibility (OBR) has now estimated that average earnings growth will come in at 5 per cent this year, lower than the 8 per cent the government has previously warned about.
She argues MPs' decision to scrap the earnings link was based on a “false premise” though her legislation would allow for adjustments due to the pandemic without losing the link to earnings entirely.
Dan Kemp, global chief investment officer at Morningstar considers what the UK wants from COP26.
It is an extraordinary challenge.
Barclays' chief executive officer Jes Staley has stepped down following an investigation by the regulators into his relationship with Jeffrey Epstein.
In a statement today (November 1), Barclays said it was made aware on Friday evening of the “preliminary conclusions” from the Financial Conduct Authority and Prudential Regulation Authority’s investigation.
It said: “In view of those conclusions, and Mr Staley's intention to contest them, the board and Mr Staley have agreed that he will step down from his role as group chief executive and as a director of Barclays.”
“It should be noted that the investigation makes no findings that Mr Staley saw, or was aware of, any of Mr Epstein's alleged crimes, which was the central question underpinning Barclays' support for Mr Staley following the arrest of Mr Epstein in the summer of 2019.”