As was expected Labour won the election and have got straight down to the job.
The new cabinet was appointed the weekend after the election, with confirmation that Rachel Reeves would be Chancellor, the first ever female Chancellor.
We await the first Budget and implementation of the tax policies which formed part of the election manifesto which we know about: changes to “carried interest” tax rules, VAT charged on private school fees, changes to the non-UK domiciles rules etc.
Rumors are flying about other tax changes which may be brought in, as it is believed the following areas are being reviewed:
- Increases to capital gains tax rates and abolishing some reliefs, although principal private residence relief (the relief that prevents tax being sold on the main home), is not to be touched;
- Inheritance tax with a possible tightening of the rules around tax-free gifting of money and the reliefs relating to farmland and businesses which currently prevents tax being paid on qualifying assets, with one rumor that the reliefs are to be capped at £500,000 per person.
We do know some immediate actions/plans by the new Chancellor, as she delivered her first policy speech on Monday on the economy and planning reform summarized below:
- Instructed Treasury officials to provide an assessment of the state of UK spending which will be presented to Parliament before the summer recess (separate from the budget);
- Outlined three pillars to economic approach: stability, investment, and reform;
- The launch of a £7.3bn national wealth fund, (much of the work already being undertaken by a taskforce led by Mark Carney former Bank of England Chair) designed to help projects such as ports, gigafactories, hydrogen and steel projects to attract a mix of investment, aiming for £3 of private funds for every £1 of taxpayer cash;
- Reform of the National Planning Policy Framework (NPPF) with a consultation on a new 'growth focused approach' to the planning system before 31 July, including restoring mandatory housing targets;
- Ending the ban on new onshore wind in England;
- Priority for energy generation projects;
- A new taskforce will be created to accelerate stalled housing sites - beginning with Liverpool Central Docks, Worcester Parkway, Northstowe and Langley Sutton Coldfield;
- 300 additional planning officers will be recruited across the country to help planning reform;
- The Deputy PM is writing to local mayors and the Office for Investment to ensure that investment opportunities with 'important planning considerations' that land on mayoral desk is brought to the attention of the Deputy PM and Chancellor;
- Deputy PM will write to local planning authorities alongside the NPPF consultation to "make clear what will be expected of them", including universal coverage of local plans and reviews of green belt boundaries;
- Chancellor has established a new Growth Delivery Unit in HM Treasury;
- Secretaries of State for Transport and Energy Security and Net Zero to prioritise decisions on infrastructure projects that have been sitting unresolved.
Jonathan Reynolds has been appointed as the Business and Trade Secretary and has called on companies to provide feedback on their priorities for kickstarting the economy. As part of the first 100 days’ ambitions, Reynolds is asking the business community to get involved with the future direction, with a call for urgent feedback on key focus areas for reform.
In a Linkedin message, Reynolds stated “We will continue the work we started in opposition to bring together business, government and workers to kickstart our economy and rebuild our country. There is no time to waste. That’s why, in my first few days as Secretary of State, I have spoken with dozens of business owners and entrepreneurs representing companies of all shapes, sizes, and sectors.”
The four planks of Labour business policy are to:
- Deliver a new mission-driven industrial strategy;
- Support small businesses;
- Reset trade relations and champion British exports; and
- Make work pay.
The given top priority is to develop a focused industrial strategy ‘that boosts productivity, drives clean, green power and builds a resilient economy that can stand on its own two feet’. Part of this will see the creation of an industrial strategy council which will be put on a statutory footing to ensure a long-term approach to support businesses.
The new secretary wants all businesses “It doesn’t matter if your business has one or 1,000+ employees. I want you to tell me:
- how we should use our industrial strategy to kickstart Britain’s economy;
- how you have supported your teams while also growing your business so we can take forward the best examples to inform our work;
- what’s stopping you growing if you’re a small business owner; and
- how should we use our trade strategy to drive up exports and sell more British-designed, British-made products and services to markets around the world?”
Reynolds wants to “hard wiring the voice of small business into everything we do”
Priorities include:
- Action on late payments (talked about a lot, but never action in the past);
- Reform of the British Business Bank to free up capital and access to loans (a new Government back lending scheme announced this week, Growth Guarantee Scheme, not a new Government initiative, was coming anyway, and more in August newsletter);
- Changing public sector procurement rules to open up better access for SMEs to government contracts.
Anybody who want to have their say, and influence Government policy in this area, can email the Secretary direct: TellJonathan@BusinessandTrade.gov.uk
With change of Government, we are likely, and it already seems we are starting to see a total change in policy and direction, from the position we have had for the last 14 years. The next key step/action for Harbour Key clients will be the Budget expected end of September/early October.
The one bit of advice we have for our clients now, is that any decisions made re their business or personal financial situation is not to make quick “knee jerk” decisions, as taxation is only part of any decision-making process.
Team Harbour Key will keep you updated with changes and announcements as and when they come out, and welcome clients to call to discuss their position/situation.
And please do email the Business and Trade Secretary!
