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Goodbye uncertainty, hello opportunities

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Whoever wins the election, there will be changes to the tax regime and that can only be good news for the profession. Philip Fisher looks forward to the end of the political bickering and uncertainty. 

30th May 2024
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Whatever your political persuasion, there is every chance that you heaved a big sigh of relief when Rishi Sunak soggily announced that he had asked His Majesty the King for permission to dissolve Parliament and seek the country’s support for another five years in office.

This finally brought an end to the uncertainty that seems to have been plaguing us for months, arguably ever since Liz Truss ascended to the throne promising to destroy the economy and then carelessly, in the literal sense, did her damnedest to do so.

Until someone publishes his or her memoirs, we will be in the dark as to why the prime minister called an election so abruptly that he wrong-footed some of his own ministers.

The most likely explanation seems implausible in the current circumstances, which is that his team were convinced that the Conservatives would achieve a landslide victory in an election called on American Independence Day.

My own personal theory, which does not yet seem to have hit the mainstream media, is that Mr Sunak received a quiet tip-off from Sir Graham Brady, chair of the backbench 1922 Committee, warning him that there was already a pile of 50-plus letters from MPs expressing no confidence in the leadership and that one or two more (or a couple of resignation/defections) would force a vote.

Welcome stability

Uncertainty is bad for businesses in most sectors and that certainly applies to our own. Unless there is a hung parliament with no coalition, whatever the outcome of the election, we should be able to look forward to five years of relatively consistent government and that must be good news.

Admittedly, until then we will have to endure five weeks of inexpressible media tedium, not to mention tame debates between two defiantly dull speakers.

Since the alternative could have been as many months of speculation, this seems a more palatable option. Like a phoney war, the waiting was bad for business, with clients wary of making long-term plans, entering into transactions or taking major investment decisions.

To use an equivalent in our own profession, many might have witnessed the paralysis caused by contested elections for new managing partners, where those who are supposedly steering a practice instead run around in circles panicking about the future and tacitly seeking out alternative employment, while forgetting their principal raison d’être.

Fresh bunch

The hope is that come mid-July, the country will welcome a tranche of new, enthusiastic ministers and MPs, one must sincerely hope showing greater integrity and business acumen than many of the current bunch.

This should offer the kind of stability that many of us have been yearning for since the period leading up to the referendum in 2016. Who knows, perhaps the incoming government might even begin to reverse some of the most damaging economic consequences of Brexit?

They should also begin to introduce a coherent economic strategy with an eye on growth, though whether that distant nirvana ever comes to pass must be open to question.

In addition, it would be good to see long-term planning to bolster the tax regime, ideally built around simplification, equity and building HMRC back up into the kind of efficient machine that so many of us fondly recall from our early days in the profession.

Whatever they might say in an attempt to win votes and whichever party gets into office, the likelihood is that the tax burden will rise and therefore the main issue will be who is expected to pay. One way or another, this will be our clients and they will need professional support.

U-turns ahead

I am now looking forward to reporting on issues that affect accountants in the leading parties’ manifestos as they come out and then seeing how long it takes the victors to start U-turning.

In five weeks’ time, we will know whether Labour, the Conservatives or some coalition is leading the country and not too long afterwards we should get a strong steer regarding their plans. I can’t wait.

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By FactChecker
30th May 2024 13:39

"Unless there is a hung parliament with no coalition, whatever the outcome of the election, we should be able to look forward to five years of relatively consistent government and that must be good news."

Why?
If you're talking about individuals then, yes, I believe that most people (wrongly) prefer certainty whatever it represents ... so logically would be happiest in a non-democratic autocracy and would love Putin?
Most entrepreneurs (who form a substantial portion of most readers' client-bases) however are only too aware that the visceral result of uncertainty is opportunity ... and you will see it tends to 'launch' all the step-changes effected by market disruptors in the last century or more.

Certainty is stasis (which is fine for those already comfortable with a sense of past achievement), but uncertainty is what leads to growth, innovation and change (some of which needs controlling - PPE anyone?).
Personally I don't want to wake up every morning and see the same old fur-lined rut stretching out, ready for me to follow.

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