Simon Wood 

Hello and welcome to an emergency budget special episode of Mergerspresso. I'm Simon Wood and joined by AG's head of tax, Paul Concannon. Paul, we're still speaking to each other after 13 years at AG, having joined the same day. But are you sick of speaking about the budget?

Paul Concannon 

Let's see how this podcast goes, Simon. So, I think we should start with build up just briefly. Everyone knows it was chaotic, frankly, lots of things trailed, most of them didn't happen. It doesn't paint a picture of a chancellor government in control of the budget design process. So not a good starting point purely from a process point of view.

Simon Wood 

desperately trying to avoid the use of the word Omni Shambles, but we'll let that pass. Just looking at it from a layman's perspective, it seemed that an awful lot of tax is going to be raised, but not a lot seems to have fundamentally changed. So, am I missing something?

Paul Concannon 

You're not missing something. So, it's a significant tax raising budgets somewhere between 25 and 30 billion pounds raised, but not through any significant structural changes. A lot of the hefty listing is done by what's known as fiscal drag. So, leaving income tax thresholds where they are rather than raising them through inflation. Some of the more headline grabbing changes like the so-called mansion tax really are pretty small beer in the context of the overall picture.

There's not much actually happening in big picture terms, but there is still a significant amount being raised by the Chancellor.

Simon Wood 

can't get through a budget announcement without slipping a mention of beer in, see. But Mergerspresso is most interested in the public markets. So, any developments that we should be aware of in that sphere.

Paul Concannon 

So, there's two really that have been labelled as market friendly. One is the stamp duty holiday for new listings on the London markets. It's a step in the right direction, think it's fair to say. What they really need to do is just get rid of stamp duty on listed shares entirely. This sort of thing feels like it's a bit puny, to be perfectly honest, but at least it's a step in the right direction.

Simon Wood 

Yeah, it looks to create a two-tier system between newly listed and old listed and the optimist in me sees this as a tentative step down the path to abolishing it altogether, which I think would be very welcome for city practitioners.

Paul Concannon 

You've always been optimistic. The other thing that had a market label attached to it was the reduction in the cash isa limit from £20,000 to £12,000. Again, to be frank, if this is really an attempt to drive money into the stock market, it's a bit puny. The numbers don't really add up. You look at total cash isa savings for around about 70 billion over the last year or so.

and you look at the market cap of the FTSE 100 which as of this morning was just north of £2 trillion. The money just doesn't touch the sides, that's not going have any effect at all.

Simon Wood 

Now, we're back to our favourite topic on Mergerspresso of pension reform to drive significant more liquidity to the UK markets. But that has a way to run yet. 

Thank you, Paul. Thank you for coming at short notice.

Paul Concannon 

Always a pleasure.

Simon Wood 

Normal Mergerspresso service will be resumed shortly later on in December. Thank you all for listening.