Rishi – A Summary

CITY GRUMP

I suppose all Dishi Rishi has to do for the time being, given that he has been squirting huge amounts of cash around in an effort to put out the Covid fires, is to stand and deliver platitudes and boy did he do that at the Conservative Party Conference. Take the following sentiments that could come from the lips of any politician from Albania to Zimbabwe:

  • The British people and British businesses won’t give up.
  • I know this because of what I said at the beginning.
  • We share the same values.
  • The Conservative Party and the country.
  • And these values are not devoid of meaning to people.
  • They are about protecting that which is meaningful to them.
  • Their family, their home, their job, their ability to choose for themselves what is best for them and those they love.
  • To create second chances, to see potential met, and to extend the awesome power of opportunity to all who seek it.
  • To answer questions of character with action not rhetoric.
  • To put the people first, their hopes and their aspirations.
  • And above all, to be worthy of the great trust they have placed in us.

He did, in amongst the motherhood and apple pie stuff, though come up with one big fat porky when he proclaimed:

  • In a free market economy it is the entrepreneur, who is critical.
  • And we will make it easier for those with the ambition and appetite to take risks and be bold, to do what they do best and create jobs and growth.

Granted the entrepreneur is critical to future growth but there is absolutely no sign whatsoever that the Treasury is making life easier for those “with the ambition and appetite to take risks and be bold”. Indeed so far they have steamed off in the other direction in the last budget when they decided to cut back Entrepreneurs’ Relief to capital gains of just £1m as compared to the £10m that used to pertain.

So far as the here and now is concerned, the tussle over the Enterprise Investment Scheme (EIS) tax incentive is a perfect demonstration that the Treasury continues to do zippo to encourage capital formation arising from the Covid pandemic fallout. I, and many others, have repeatedly told Sunak and his Treasury acolytes that if you want to stimulate long term capital formation for entrepreneurs during Covid19 then improve the tax break for EIS investors from 30% to 50% thus encouraging risk taking and boldness. This though is continually blocked by the Treasury who whine about it infringing State Aid. Dishi hasn’t the stomach to defy his officials as, thanks to his Goldman Sachs training, he knows nothing at all about the lifecycle of small companies. Plus ça change.

The City Grump has spent some 40 years in the City of London. He started as a stockbroker’s analyst but after some years he decided he was too grumpy to continue with the sell side of things so he moved to the buy side and became a fund manager for the next 20 years, selling his own business in the 1990s. Post the millennium, he found himself in turn chairing a stockbroker, a financial PR company, and an Exchange. He still keeps his hand in, chairing a brace of VCTs and investing personally in start-ups. The City Grump’s publications are available here.