The Notebook: Neil Bennett on how the Treasury made the BBC look very slow indeed
Writing a column on the morning of Budget Day is always a thankless task. By the time you read this, most of you will know what is set to come out of that red box, while I can only speculate.
That said, it’s nice to see that Jeremy Hunt is now following in his predecessors’ footsteps by leaving a trail of news breadcrumbs in the run-up to his announcement, just to set the tone. The biggest one at the time of writing is the suggestion that he is going to raise the lifetime cap on pension saving. This will no doubt annoy George Osborne, who spent years cutting it with evident enthusiasm.
This is said to be intended to persuade the 50-somethings who have taken early retirement to return to work, especially doctors. If so, it may be a case of wrong diagnosis, wrong cure. I believe that the main reason people have taken early retirement in the past few years is rather more closely related to the pension freedoms that were announced by Osborne a decade ago, rather than the restrictions on savings. While few people will have blown their pot on a Lamborghini, as the pensions minister speculated at that time, they might certainly have grabbed it to fund an early exit from the workplace.
A financial adviser once told me that there were two universal truths in his job – clients always over-estimate the returns they will make on their savings and underestimate their life expectancy. As a result, they risk chronic financial hardship late in their retirement when their financial needs are greatest (for social care etc) and their opportunities to work again are minimal.
An effective way of dealing with this would be to reintroduce some structure into pension planning, ensuring that a proportion of a pension pot was only available after the age of 70 or 75 perhaps. And that is what the increased cap could be reserved for. In the shorter term why not offer National Insurance relief to people who have paid NICs for 30 years or more and therefore already qualify for a full state pension? If we really are becoming a nation of silver-haired idlers, then the Chancellor needs to dream up some rather more immediate incentives than this one.
Quicker than Auntie?
That said, I was impressed by the speed the Government reacted to the Silicon Valley Bank failure this weekend and managed to secure a market solution within 48 hours. I doubt Rishi Sunak’s predecessors would have moved so effectively and decisively – then again if there is one thing he knows about, it is banking.
In the West End, things weren’t so impressive. What does it say about the BBC that it took longer for them to clear up the Gary Lineker mess than the government took to resolve the largest bank failure for 15 years?
The aftershocks from the SVB failure, however well handled by the powers that be, will do nothing to restore confidence to the financial markets. In the Square Mile deal volumes, and especially IPO volumes, are lower than ever. Most firms are holding on, waiting for the upturn to come and the creak of tightening belts can be heard from Cheapside to Canada Square. One old hand said he had hoped things would pick up in H2 this year. Now he is looking out to H1 2024 for any real action. Ever the optimistic I will remain on green shoots watch and report back when I see one.
Can I quote you on that?
Irish visitors can afford it with their strong currency. Yours for £20.William Woodham, Fitzdares CEO, is unapologetic about the price of his ‘special’ Guinness at this week’s Cheltenham Festival. It combines the black stuff with the sparkling stuff.
A fine excuse for a trip to the seaside….
This week I would like to recommend you go to see a rather wonderful new exhibition called Reflections of the Silk Road in the Brighton Royal Pavilion on the 21st and 22nd March (10am-5pm). This will display a unique collection of handmade porcelain produced from a small studio in Sussex that captures the full richness of the artistic tradition of the Silk Road, from Persia to China. The centrepiece will be the Coronation Bowls – seven vases that are inscribed with a 360-year-old poem celebrating the Coronation of Charles II, that has come to light just before the Coronation of Charles III. I would like to see you all there, not only because it will be a very special affair, but also because the artist, Carole Bennett, happens to be my wife. All proceeds are being donated to Depaul International and their work to alleviate homelessness.
Neil Bennett is global co-chief executive of advisory and communications firm H/Advisors