SUMMARY OF QUARTERLY ECONOMIC AND INVESTMENT UPDATE CONFERENCE CALL

During the second quarter of 2024, US stock markets reached new highs even though central banks seem less keen to cut rates than was expected earlier in the year. On the political front, there have been several surprises, including the decision by President Macron to call a snap election in France, the closer-than-expected election result in India and the performance of President Biden in the recent televised debate. Less of a surprise was the election result in the UK; the change in government was indicated by the polls throughout the campaign, with the only real uncertainty being the size of the Labour majority.

Details on tax changes and spending plans under a Labour government may not be clear until the Chancellor’s first Budget, likely to take place in the early Autumn. What we do know is Labour plans to address two key problems in public services – NHS waiting lists and the need for more specialist teachers – by raising £8.6bn through clamping down on tax avoidance and evasion, changing the tax treatment of carried interest for private equity professionals and applying VAT to school fees. Second, they plan to introduce a windfall tax on large oil and gas companies to finance green projects. These proposals, they claim, are the limit of their tax raising ambitions. However, if extra spending is required in due course, taxation may need to be increased. Despite promising not to raise the rates of income tax, national insurance, VAT or corporation tax, additional tax revenue could still be gained from broadening the base on which tax is levied, or through changes in thresholds and allowances.

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