A Budget That Gordon Brown Could Be Proud Of
Coronavirus or not, a £30 billion stimulus for the UK is positively Brownian in its fiscal ambition. And we know how that story ended.
Yet it was largely a non-event for EIS investors, albeit with some large caveats. There were rumours in the market that the government was to withdraw some of the tax generosity associated with EIS, but this seems to have been little more than careless whispers.
Yet in a move of little surprise for most, Entrepreneur’s Tax Relief had the lifetime cap of £10 million reduced to a £1 million cap, which I suppose is better than being entirely scrapped, and that is precisely what this most widely leaked budget measure was supposed to have done. In this context one might argue that the so-called ‘compromise’ is good news for entrepreneurs, but in the same way that Meryl Streep having to give up only one of her children in Sophie’s Choice was good news for motherhood. Why is it that this government seems to be willing to make this relatively small budget item such a large part of their advance PR campaign, whilst simultaneously reversing the trend towards getting the fiscal situation under control?
Perhaps part of the reason involves Dominic Cummings getting his way on substantially increasing the government spend on R&D. I don’t necessarily find this wholly objectionable, but it is interesting that the government (aka Cummings) seems to be applying a Svengali approach to public policy and superimposing it on innovation and technology development. There seems to be at least a partial suggestion that government incentives to entrepreneurs are somehow distasteful, and it’s much better if the central hand of government decides the nation’s industrial strategy.
The trouble with the French is that they don’t have a word for entrepreneur!