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This is not a Budget for long-term growth… nothing to help businesses or inspire investors

Professor Joe Nellis, Professor of Global Economy at Cranfield School of Management and economic advisor at professional services firm MHA, delivers his verdict on the Spring Budget.

DESPITE the length of the Chancellor’s speech, there were no rabbits pulled out of hats. In general this was not an ambitious budget, with the sole aim of political point scoring. This is the start of an election campaign.

Professor Joe Nellis.

The Chancellor has taken a shotgun approach and failed to hit any obvious targets. This was a budget designed to win votes and grab headlines, not create meaningful change. This was a missed opportunity, especially as there was nothing to help business or to inspire confidence from external investors.

The Chancellor stressed throughout his Budget speech that his priority is creating the basis for long-term growth of the UK economy but economists will struggle to spot the measures that will make this happen.

‘Investment is the Engine of Growth’ but the Chancellor could have been much more ambitious by announcing, for example, a cut in corporation tax or at least promises of cuts to come in order to boost confidence in the business world.

The Office for Budget Responsibility has predicted that the UK economy will grow in 2024 by 0.8%. This is optimistic and it remains to be seen whether the current recessionary environment can be reversed quickly. If not, the economy will at best flatline this year.

John Maynard Keynes was famous for his dictum ‘Spend, spend, spend’ your way out of recession. The Chancellor did not have the headroom to follow the advice of Keynes.

The next few years will be tough for the UK economy. Nevertheless, those in work will benefit from the cut in National Insurance, which combined with the NI cut announced in the autumn, will mean that the average worker on £35,000 per year will be about £80 per month better off.

The Chancellor was content to announce a large number of small measures but collectively these are unlikely to shake the economy out of its lethargic state.


Chancellor sets out stall for the UK to become a global tech hub

THE BUDGET unveils a clear focus on nurturing and bolstering the tech sector, marking a significant stride towards positioning the UK as a global tech hub akin to Silicon Valley. Jeremy Hunt’s speech emphasised tech’s pivotal role in driving innovation and economic growth.

MHA partner Jason Mitchell says: “Hunt underscored the government’s commitment to fostering an environment conducive to tech start-ups, aiming to retain burgeoning enterprises within the UK’s borders. Moreover, he highlighted support for more established tech firms, notably advocating for tech businesses to list on AIM, showcasing a dedication to facilitating their growth and expansion.

“One aspect of the Budget was the Chancellor’s recognition of the transformative potential of technology in public services. Hunt outlined plans to leverage AI and IT to streamline administrative processes in the NHS as well as deploying tech solutions such as drones to enhance police operations and crime reporting.

“These initiatives not only demonstrate a commitment to improving efficiency but also highlight the government’s recognition of the integral role tech plays in modernising essential services.”

The Chancellor reported significant advancements in STEM education, signalling a concerted effort to cultivate a skilled workforce capable of driving technological innovation forward. “The allocation of £4.2 billion in funding for public services to invest in new technologies underscores the government’s commitment to harnessing tech to improve the delivery of essential services,” says Mr Mitchell.

The Budget also includes a £360 million package aimed at supporting innovative research and development in key sectors such as life sciences, automotive, and aerospace. “This injection of funding signifies a strategic move towards digitisation and underscores the government’s recognition of the importance of technological advancement in driving economic growth and competitiveness.

Mr Mitchell’s conclusion: The Budget signifies a resolute commitment to positioning the UK as a global leader in technology and innovation. “By fostering an environment conducive to tech entrepreneurship, investing in research and development, and leveraging technology to improve public services, the UK government is laying the groundwork for sustained technological advancement and economic prosperity in the years to come.”


Housing sector needs a stimulus. It has not had one

Brendan Sharkey, real estate and construction specialist at MHA, assesses what the Chancellor’s words mean for the construction sector.

MAYBE there was too much logic to think that the Chancellor would address the housing market in the Budget announcement.

Housing along with education and health are primary needs. Unfortunately, unlike the latter two housing provision is not under the control of government and it needs a stimulus. The development of more affordable and energy-efficient housing should be a point of policy, particularly given the current status, which is clearly recognised by Michael Gove [Secretary of State for Levelling Up, Housing and Communities].

Reforms to Stamp Duty Land Tax by increasing the nil rate band to help first-time buyers, making the duty payable by the seller and not the buyer thus also incentivising downsizers, would have increased the volume of transactions but not diluted the Exchequer’s tax take.

The withdrawal of SDLT relief for multi-dwelling purchases may reduce tax avoidance but will not change the housing provision.

The reduction in Capital Gains Tax following the sale of residential properties from 28% to 24% recognises that this will increase the volume of transactions. So why not 20%, which is the standard rate?

What is so wrong in giving tax relief for energy-efficient improvements to the landlords rather than criticise for poor quality housing?


Don’t let the tax tail wag the investment dog

With the Great British ISA, the devil is in the detail, says Dominic Thackray, financial advisor at MHA Caves Wealth.

IN THE SAME vein that the Mansion House Compact is looking to encourage investments into UK unlisted companies with pensions, Hunt is looking to introduce the Great British ISA as a £5,000 extension to the £20,000 ISA allowance.

Outside of the debate around the dictation of asset allocation, which should vary between investors when considering their views on risk, my consideration is around the complexities under which this could be introduced to provide value and other opportunities.

In my view, this will likely be dictated by the restrictions on what UK investments are available within the Great British ISA.

If this is in line with the Mansion House Compact this may require investment into unlisted companies. The nature of accessing these either requires large amounts of capital to bring value, which the £5,000 a year allowance prohibits, or via an open-ended investment fund pooling money from groups of investors and managed by fund managers.

As ever, the devil is in the detail but there is the risk that opening to the use of larger UK-listed companies will place little restriction on how much commercial activity takes place within the UK.

If the use of UK unlisted equities is stipulated, the nature of these investments means active investment management, potentially the lack of daily liquidity and at a higher cost than listed investments as identifying smaller companies comes at higher expense.

If this is the case, and investors are looking to invest into small UK companies, are Venture Capital Trusts better placed?

VCTs are pooled investments and achieve tax-free returns in the same way the Great British ISA would. They also come with a 30% income tax relief claimable on the amount invested with an annual allowance of £200,000.

As ever, the phrase ‘Don’t let the tax tail wag the investment dog’ springs to mind, but it may be that there are existing investment vehicles better served for some if there is a large constraint on the type of UK companies that can be invested into with the Great British ISA.

VAT registration thresholds

Alison Horner.

MHA partner Alison Horner: “The increase of the VAT registration threshold is not a headline grabber and not much more than an inflationary rise. While we would have hoped for something higher to take even more businesses out of VAT, it is encouraging to see the limit being raised and hope to see the threshold go higher in years to come.”

Retail Export Scheme: Retailers’ lobbying comes to nothing

“What more is needed to persuade the Chancellor to abolish the tourist tax and bring back the Retail Export Scheme?” asks Alison Horner, MHA’s head of indirect tax.

“It was a great surprise that this did not happen with the extensive lobbying by high-end retailers and convincing financial evidence that it generates up to £11 billion for UK plc. UK shoppers will be more interested in tax cuts than supporting wealthy tourists but it is an unpopular move in the luxury goods retail sector which will be looking for a boost in these inflation-stricken times.”

FUEL DUTY: Temporary 5p reduction extended to March 2025

Fuel Duty continues at 52.95p for the next 12 months.

Andrew Thurston, tax director at MHA, says: “These announcements are welcome news as the price of fuel appears to have stagnated around the £1.50 per litre.  With the increasing uncertainty in the Middle East, the cost of fuel could easily rise again so the 5p reduction remains a topical relief although it is difficult to see if the consumers have actually benefited from the 5p reduction with the prices continually fluctuating.

“The hope is that this will help with the impact of UK transport costs within the supply chain, further reducing the cost of goods to the consumer.“

The example below provides an overview of the estimated savings of the 5p reduction for an average Heavy Goods Vehicle.  As you can see, the savings appear minimal but, for a refuel each day over a 12-month period (365 days), the temporary relief equates to £24,159.35 per HGV.  These figures show the potential effect on supply chain costs that this relief provides.



Fuel Tank Capacity (ltrs): 1250
Cost of fuel on 30/12/22* £1.49.7
Cost of fuel on 06/03/24* £1.52.6
Cost to fill up (Dec ’22) £1,871
Cost to fill up (now) £1,907.5
Difference: £36.50 +1.9%
Fuel Duty (57.95ppl) £724.38
Temporary 5p Duty relief saving £66.19
VAT saving on fuel relief £13.23
Total reductions £79.42


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