I was asked recently whether I’d like to present on the budget. The idea was the familiar one: John Healey sits down on Wednesday 28 October, and the following morning a room of business owners gets a run-through of what he said, with coffee, slides and a few questions at the end. I said no. Not because I’ve nothing to say about budgets (anyone who has sat in a meeting with me knows otherwise) but because I stopped believing in that format the best part of twenty years ago, and nothing since has changed my mind.
The budget-day seminar is what local accountancy firms used to do, and plenty still do. Get the clients in, hand round the Treasury’s summary with your own logo on the front, tell them what the chancellor said. It made sense once. Before the internet, if you wanted to know by Thursday morning what had happened to capital allowances, your accountant was a reasonable place to find out.
That world has gone. The mainstream media now cover the budget quickly and, on the whole, very well. By the time the chancellor is back in Downing Street there are live blogs, calculators, a dozen explainers and a columnist or two telling you what it means for your pension. The Times, the FT and the BBC have more people on it than any firm in Shropshire could field, and they’ve been at it since lunchtime.
Then there’s the leaking. It used to be a resigning matter. In 1947 Hugh Dalton mentioned a handful of his measures to a journalist on his way into the chamber. They were in the Star’s late edition before he’d finished speaking, and he had resigned by the following day. Compare that with now, when ministers keen to show how close they are to the action brief the papers for a fortnight beforehand, and the Speaker is left complaining from the chair that he read most of it over breakfast. By budget day the surprises are few, and the ones that remain are reported in detail within the hour. There isn’t much left for a seminar to reveal.
Jessica Cook, a financial planner writing in The Times on 15 October, put it better than I would have. Her headline called the speech theatre, and her argument was that the arithmetic the Office for Budget Responsibility publishes the moment the chancellor sits down matters far more than anything he says standing up. Where the headroom comes from, real money from a tax rise or a spending cut, or a growth forecast nudged in the right direction, is what the gilt market will be reading while the rest of us wait for the sketch writers.
She also had a line for anyone tempted to act on a rumour, and it’s the most useful sentence I’ve read about this budget. Before you do anything, “ask whether you could undo that action in December”. Taking tax-free cash out of a pension, crystallising a gain, making the gift that starts the seven-year clock: these are one-way doors. Her figure for pension lump sums was stark. Withdrawals roughly doubled in two years, much of it by people who’d read that the allowance was about to be cut. Whatever this budget does to it, the money that’s already out can’t go back in.
I know this format from the inside. When I was a partner in a national firm we ran a budget breakfast every year, and I remember them with some affection. There was always a swathe of tweed along the back row: the local farming community, who had come together to talk about farming amongst themselves over coffee and a bacon sandwich. My colleague who presented knew his tax inside out, and to be fair to him he was good. But I’m not convinced it was his view on agricultural property relief that got them out of the Land Rover at eight in the morning. It was the bacon.
Which is fine, as far as it goes. People came, there was a chat, a few cards changed hands. But be honest about what it was: a marketing event with a budget attached. Nobody in that room learned anything they couldn’t have read on the way home, and nobody’s position was improved by a slide.
So I’ll leave the local firms to their presentations. If the bacon sandwiches are good, go. I won’t be on the stage, and CBSL Accountants won’t be hiring a room.
What we’ll do instead is less visible and, I think, worth a great deal more. On the morning of 29 October our clients won’t need me to tell them what the chancellor said. They’ll have read it. What they’ll want to know is what it means for the business they run and the plans they’ve already made with us: the sale that’s part-way through, the shares that were going to the next generation this year, the pension contribution pencilled in for March. Those questions are specific. So are the answers. Neither suits a room of sixty people and a laser pointer.
Some of those conversations will be short. Most budgets leave most people where they were. A few will matter a great deal, and those are the ones where knowing a client’s affairs beats knowing the budget. You can’t get that from a slide, and you can’t get it from a firm that met you for the first time over a croissant.
So that’s where we’ll be: at the end of the phone, or across the table, working through the detail for the people who pay us to know their business, rather than playing to a room. It isn’t a show. It isn’t meant to be. The budget has enough theatre in it already.
Adrian Barker, CBSL Accountants
