The sound you possibly heard coming from the City of London at 10pm last night was a sigh of relief. The private jets are being put back in their hangers, one way tickets to the Bahamas ripped up and the “Doss-house” sign will remain in the Chequers garage. The country has spoken and has rejected Jeremy Corbyn’s political version of the Life on Mars TV series.
The immediate reaction to such a large Conservative majority has been as one would expect; a significant rise in the Pound, and as I type, an over 4% increase in the FTSE 250 Index. Interestingly it has also resulted in positivity in the major European markets, which is probably a result of some certainty finally arising in the continent which has been as badly affected by the Brexit debacle as we have been.
What a strange feeling this is, one we haven’t experienced for nearly twenty years - a government with a huge majority, which SHOULD be able to implement its policies without any real objection. Gone are the wafer thin majorities and coalitions that arose from the last three elections.
Irrespective of political colour I have to say this is not before time. Far too much energy has been spent dealing with the Brexit vote over three and a half years ago, and it is time the House of Commons started governing and dealing with the other issues that we are currently facing.
Now apart from getting Brexit done the Tory manifesto was fairly thin when it came to policy other than increasing spending on the NHS, Police and Education, although it did state that no tax cuts will be implemented in the immediate future.
So what would be my priority? Well I believe something needs to be done pronto with regard to pensions legislation which is ridiculously complicated for high earners and is having, what I am sure were unintended, huge consequences as a result. Any piece of legislation which is in effect forcing senior consultants and surgeons in the NHS to retire early as it is not worth them continuing to work is ridiculous, given the limited resources we seem to have in these areas at present. And it is not only the NHS that is losing experienced talent as a result of this legislation. Get it fixed Boris!
Although it hasn’t been confirmed, it was suggested the first Budget prepared by the new administration will take place in February and it would be guesswork at this stage in trying to predict what it may contain. However, it would be nice to have some continuity with the current tax regime.
Hopefully this new political certainty will result in overseas investors considering the UK once more, and if even half of the £140bn that was taken out of the UK stockmarket by foreign investors since May 2016 returns, it will be a huge shot in the arm to performance in the coming years.
But all that is in the future and for now hopefully we can look forward to a period where politics will no longer dominate our lives, but living in Scotland I suspect this may be a forlorn hope.
In the meantime I wish every one of our friends and clients a merry, healthy and relaxing Christmas and New Year.
P.S. These missives will now come out every two months, alternating with Alan’s “Letter from Linlithgow.” However there may well be special editions that will come out when needed.