Autumn Statement 2023: 110 ways to ignore an election

In his Autumn Statement, Jeremy Hunt worked his way through 110 individual announcements – covering everything from pints to planning to pensions.

But it was clear that the election elephant was in the room, sitting front-and-centre opposite the despatch box. And so, the announced measures broadly fell into two camps.

There were short-term political measures to try and boost support ahead of a general election. Most prominent was scheduling the 2% cut in National Insurance rate to take place in January 2024, rather than next April – bringing forward the benefit to the voting public. Much of the narrative around this budget was also designed to emphasise the strength of the UK economy, and cast the last year in a positive light for the current government.

There were also announcements which acted more as a manifesto for the next Conservative government. Many of these measures are exactly the sort of long-term projects and changes that should provide a productivity boost to the UK economy over the next few decades (we discuss a couple of the more interesting ones below, because we like long-term thinking and planning!).

Of course, what most investors want to know is whether there’s any impact on our portfolios and our investment strategy. The simple answer is no.

First, financial markets rarely respond to these kind of events (the Liz Truss/Kwasi Kwarteng 2022 mini-budget was the exception, rather than the rule). And today has seen exactly that – the UK equity markets, bond markets and currency markets are having just another day at the office.

And second, our portfolios are globally diversified, with a large chunk of the assets invested in regions which have little or nothing to do with UK politics – including many of the largest FTSE 100 companies themselves (which typically earn most of their money abroad).

There may well be some individual aspects which are worth talking to a financial planner about, but from a portfolio perspective, there’s nothing to see here.

Our view on the potential productivity boosters (although they should be seen as pending until an election!):

• Full capital expensing for businesses made permanent. For businesses to grow, they need a solid foundation. That means having the basics working well – whether that’s efficient trucks, powerful computers or even suitable chairs and desks. Incentivising businesses to invest in the underlying equipment and systems that their employees need is crucial to maintain private investment in growth in the UK.
• Pension pot reforms. Unlocking the pension savings of the UK is something which needs to be done very carefully. But allowing people to save into one pension, regardless of employer, is a good start – the easier it is for people to see their pensions, the more likely they are to engage in what they are owning.

*In this video, Ben mentions the mini-budget occurring in 2023. It was announced in September 2022, however.