Susannah Streeter: investors are bracing for tax rises
The Notebook, where the City’s movers and shakers have their say. Today financial commentator Susannah Streeter takes the pen
Usually, at this time of year we would be enjoying Médoc’s beautiful beaches, looking forward to long lunches, endless stretches of Atlantic coastline and enjoying the region’s famous wine as the sun sets. But the devastating fires that ripped through the Gironde put plans for thousands of holidaymakers and the businesses they support in jeopardy. Volunteers and firefighters, including my lovely friend Jean-Michel, have been working around the clock to protect homes, forests and livelihoods. Thankfully the situation has stabilised after what’s been a traumatic time, there’s been some rain over the last few days, and last night I was able to share a few glasses with Jean-Michel as he recounted the heroic actions of his crews. We’ve made it back to this stunning region after all, after authorities urged visitors to return. The immediate human cost is, of course, immeasurable but the economic bill mounted almost as quickly as the flames spread. Tourism businesses are losing what should be some of their busiest weeks of the year. I’ve been holidaying in this stunning region for most of my life and know how hard they work to make it so special for tourists from across Europe. There’s such a narrow window to capture trade, and they need all the help they can get right now. Governments here and elsewhere, already wrestling with stretched public finances, are now faced with another sizeable support and reconstruction bill. As extreme weather events become more frequent, spending is set to accelerate on everything from fire defences and water infrastructure to more resilient electricity networks and communications systems. For infrastructure investors, engineering companies and renewable energy businesses, the rebuilding and resilience effort could create opportunities that last for decades.
Defence deep dive
The theme of resilience was also front of mind as I swapped markets for military strategy and put my RAF hat back on to host the Global Air Chiefs’ Conference in London. There is likely to be a quiet sense of relief among many of the military leaders gathering following the appointment of John Healey as Chancellor. Having spent years making the case for stronger defence capability, he understands better than most the challenges armed forces face in an increasingly dangerous world. The question now is whether he can square that understanding with the Treasury’s unforgiving arithmetic.
A taxing summer
As Andy Burnham rose to power, summer drinks receptions across the City quickly turned into tax speculation sessions. Our latest Wealth Club survey found that 98 per cent of investors are bracing for a rise in taxes over the next year. It’s understandable that many are wondering whether they should be making wholesale changes to their portfolios. My answer is usually the same – don’t let the tax tail wag the investment dog. History tells us that reacting to speculation can prove expensive. Selling successful investments too early can crystallise tax bills and mean missing out on years of compounding. Instead, investors should make full use of the tax-efficient wrappers already available, whether that’s ISAs, pensions or, for those who understand the risks involved, Venture Capital Trusts, Enterprise Investment Schemes or Seed Enterprise Investment Schemes.
98 per cent of investors are bracing for a rise in taxes over the next year
Big brand power
Back on the high street, there are at last some encouraging signs that consumers are more upbeat. Wimbledon and the World Cup under sunny skies have helped tempt shoppers back, while Unilever’s latest results highlight the power of trusted brands. After several years when inflation did much of the heavy lifting, shoppers are now actually buying more of their products rather than simply paying higher prices. But it’s not across the board. While consumers seem to be happy to go for big names when it comes to beauty and personal care, with Dove and Vaseline continuing to command particular loyalty, when it comes to groceries we are much more likely to shop around. While Marmite and Hellman’s are still household names they aren’t as sticky as body wash, and that’s why Unilever is still keen to find them a new home, outside its core power brands business.
Treading the boards
After a summer spent talking about defence, fires, economics and markets, I’ll also be taking my seat at the Bristol Hippodrome to watch Annie. It’s not just because I love a Miss Hannigan performance, I am also trying to decide what production my daughter’s theatre group should stage next. Somehow, and I’m still not entirely sure how it happened, I’ve also become chair of the group. Ask a busy person, as the saying goes and I definitely seem to have developed a serious case of volunteeritis. Watching nearly 1,200 tickets disappear for our recent production of School of Rock, seeing 43 young performers light up the stage and hearing a message of support from Lord Andrew Lloyd Webber himself reminded me why so many parents willingly give up evenings and weekends to make these productions happen. They transformed themselves into stage managers, wardrobe teams, front-of-house staff, prop makers and lighting crews, all while juggling careers as teachers, lawyers, investment analysts and countless other professions.
We often talk about the value of volunteering, but perhaps we don’t recognise enough what these parents bring back into the workplace. Organising productions, solving last-minute crises, motivating teams, managing budgets and delivering under pressure are skills every employer values. Supporting children’s clubs helps build stronger, more resilient workforces. At least that’s what I keep reminding my husband when he quite rightly questions if I really have time for another volunteer position. No wonder I need a holiday.