The “real test” of the Budget will not come today or tomorrow, but in the months and years ahead, Royal London director of policy and external affairs Jamie Jenkins has warned.
He pointed out that some policies, such as the changes to non-dom status and VAT on private schools, were trailed weeks ago.
“When you add those up, they contribute significantly towards the £40bn target,” he told Money Marketing.
“Introducing such measures without any prior indication would likely have caused a strong market reaction if they had all been announced today.
“But, by phasing the information over several weeks, the impact has been somewhat softened.”
The effect of all the policy changes announced today, he added, “remains to be seen”.
“We’ll now see how these changes affect employers, particularly with the added costs.
“Some employers are already voicing concerns, given the simultaneous increase in National Insurance, the Employment Rights Bill, and higher minimum and living wages.”
Some, he said, have even called it the “perfect storm” for businesses.
“There may be exemptions for smaller employers, but we’ll have to wait and see.
“Employers will have some options: they could limit wage increases, reduce hiring, or adjust their business investments.”
Jenkins also pointed out that there had been a “real concern” that there might have been a “6 o’clock tonight change” to pensions, particularly around tax-free cash.
“This could have caused a lot of turmoil concerning people’s retirement planning. But it didn’t happen, which is good.”
Comments