As pandemic’ weeks go – and boy have I had enough of them to last me a lifetime – this last one has been a little more encouraging. More smiles than scowls.
So, we now have a Covid-19 vaccine on the horizon – and its introduction can’t come fast enough given the fact that the virus has so far taken 51,000 of our precious lives and continues to do so at a rate of 500 a day.
Let’s now pray that there are no hiccups along the way – as unfortunately there often are with new vaccines – and that the Government, National Health Service and general practitioners’ surgeries nationwide can all step up to the mark when the vaccine is rolled out.
Looking ahead: Rishi Sunak has been making all the right noises by stating that he wants to encourage consumers to start spending again as soon as life returns to some form of normality
Vaccine ‘euphoria’ has also had a positive impact on the UK stock market with many shares rising sharply in response to news of the vaccine and the prospect of the economy and ‘life’ returning to some form of normality.
Only the political machinations at No10 Downing Street took the edge off what was a good week for the FTSE100 Index of leading shares – up more than six per cent, but still some 17 per cent down year on year. More please.
Rising stock markets are good news for our pensions and Isas. Indeed, if analysts at Goldman Sachs are to be believed, the FTSE100 could break through 7,200 late next year (it finished Friday at 6,325). More reasons to be cheerful.
Of course, we’re not yet out of the prickly Covid-19 woods. For sure, the economy will retreat again before moving forward. Indeed, leading economists are now talking about a double-dip recession as the recovery in the economy – seen throughout the summer months – peters out as a result of the recent lockdowns.
For many families, this means that further financial hardship despite the best efforts of the Government (and, in particular, Chancellor of the Exchequer Rishi Sunak) to ameliorate the devastating impact of lockdown on employment opportunities.
Last week, Sunak was making all the right noises by stating that he wanted to encourage consumers to start spending again as soon as life returns to some form of normality.
Spending that will drive the economy forward in the same way as Sunak’s summer time Eat Out To Help Out Scheme did. Thankfully, there was not a squeak from him about whether he would embrace the recommendations from the Office of Tax Simplification on reform of capital gains tax. ‘Reform’ that is simply code for higher tax rates on capital gains and restricted annual tax-free allowances. Thoroughly Corbynesque in its recommendations and a move that could raise some £14billion for the Treasury.
I trust Sunak quietly ignores the office’s report because if the proposals are introduced they will result in yet more hardship among middle-class savers, amateur landlords, owners of holiday homes and many small businesses.
People who have already suffered financially as a result of economic lockdown – whether through being forced out of business, made redundant, seeing their savings interest decimated by the banks or losing tenants no longer able to afford their rent.
The consequences of higher capital gains tax rates are unpalatable. They would trigger a fire-sale of buy-to-let properties as landlords sought to take gains ahead of a more draconian tax regime – as well as deter wannabe landlords.
Similarly, investors would seek to crystallise gains on shares they have made decent long-term profits on. They would also discourage some entrepreneurs from setting up businesses – at a time when we should be encouraging people to go it alone and make the economy more dynamic.
Last week, former Government Minister David Davis gave the office’s recommendations both barrels. He said the focus of the Treasury should be on driving forward the economic recovery, not on implementing tax increases that cause economic self-harm.
He added: ‘The Treasury would have to be pathologically stupid to implement such nonsense. What we need now is more saving, more investment, more wealth creation and more job creation. This deeply un-Conservative policy would undermine all of these things.’
Spot on. This report should be binned by the Chancellor. The sooner the better, so we can continue to smile, not scowl.