Budget fails to impress financial services industry

The immediate reaction to Gordon Brown's budget announcement has been one of anti-climax today as changes announced will have little impact on the financial services industry.

Few proposals caught the imagination apart from the 1% increase in employers' National Insurance, the abolition of stamp duty on all commercial properties in deprived areas and the working family tax credit.

Gordon Brown's proposal to abolish stamp duty on all commercial properties in deprived areas, known as Enterprise Neighbourhoods, was applauded by David Bitner, technical marketing manager, from Bradford & Bingley's MarketPlace.

"This abolition of stamp duty will allow businesses to invest in property themselves. As a result they will be more attuned to putting out a good image and will be prepared to spend the money to make a property look decent, which will go some way to improving the local environment."

Summing up the Budget, Ray Boulger of Charcol comments: "There'll be little direct impact on the financial services industry. Some things we thought might happen weren't even mentioned, apart from the issue of stamp duty."

On the subject of stamp duty, Boulger thinks Brown has missed an opportunity to make the system fairer by failing to change the way it is charged. Boulger says the current increase in charges when a £250, 000 or £500,000 threshold is stepped over leads to market distortion. He wants to see a relative and gradual increase in charges.

The Association of Private Client Investment Managers and Stockbrokers (APCIMS) also made it clear they were not impressed.

The association said Brown's speech contained no good news for savers, the markets or those saving for their old age and could have serious repercussions on the investment goals of millions of people.

APCIMS said the Budget plans revealed today failed to address every issue of interest to the saver. Capital gains tax on smaller investors, complicated ISA and pension rules and stamp duty on shares, all need urgent reform to encourage investors to return to the market, adds the group.

APCIMS Chief Executive Angela Knight says: "The idea of taxing people for trying to take care of their own financial futures is a complete contradiction of the Government's aims to help investors and business. If the Government seriously wants us to invest sensibly for our own financial futures it will have to address the anachronism that is stamp duty, simplify the morass of capital gains tax and ISA rules and allow pensioners more freedom to invest their funds sensibly and effectively."

"Prudence has taken a back seat in this Budget. It provided a real opportunity for the Chancellor to make some fundamental decisions to further the Government's aims. But it was an opportunity that was lost," added Knight.

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