Budget purdah was a big thing for Hugh Dalton, the Labour Chancellor of the Exchequer. In 1947, writes Paul Wilson, he was chatting to a journalist on his way to the chamber to deliver his budget and mentioned one of his announcements.
It cost him his job.
For centuries it has been the tradition that Chancellors keep absolute silence on the budget for the six weeks leading up to the denouement in the chamber on budget day. This was waived in 1993 at the request of the then Chancellor Ken Clarke. The 24 hour news cycle, international trade and digital trading had changed the game. As opposition politicians were not covered by Purdah they briefed freely, and sometimes outrageously, the markets needed the treasury to be freed to counter this one sided narrative.
Since then budget speeches have rarely included anything not hugely trailed in advance.
Will this be the same today…?
What we know (or think we do) so far:
- The SDLT (stamp duty) holiday will be extended, probably by three months
- 5% temporary VAT for hospitality
- Furlough will be extended
- No immediate tax rises
- Corporation tax will rise gradually, but probably just for bigger companies
- Grants for the Arts to keep going
- Flags in the air for a revised CGT regime
- 5% deposit scheme for first time buyers
- Personal tax allowances and thresholds frozen
- The Chancellor prefers Mexican Coke
And what we are hoping for, and is quite likely:
- A rollover of 2020/21 reliefs that have been unused
- A significant extension to EIS, VCT and Seed EIS and possibly a new class of incentives to deliver a Brexit benefit to innovation
- A scheme to level the taxation playing field between online business and the high street
- A series of tapered assistance targeted to those people and businesses most impacted by the last year.
- A fraud resistant extension or successor to BBLS and CBILS
- An NI holiday to aid recruitment
And what may have been hiding in the trees:
- A one off wealth tax
- An excess profits tax
- Restrictions to Pension contributions and limits
By the time the Chancellor sits down this afternoon, we will know the answers to all the above. Wealth DFM Magazine will be focusing on the announcements most relevant to the investment world, particularly once we have the Red Book for the detail behind the sound bites.
Watch for updates throughout the coming days