Gordon Brown has left office and few in the financial services industry will lament his departure.
But his parting speech last week was one of dignity and humility little like Margaret Thatcher’s moment where she left with a tear in her eye.
On the steps of Number 10, Mr Brown repeated his most commonly used word, ‘fairness,’ which seemed at the heart of his personal philosophy, and one with which many would find it hard to argue.
His problem came in the policies he pursued under the guise of this fairness and how he tried to redistribute wealth in the interests of achieving it.
The new Prime Minister David Cameron also talked regularly about fairness in his election campaign and he will face a considerable challenge to achieve it while managing the deficit.
There is no doubt tough spending cuts will need to be thought through by the new Government, but it remains to be seen how long the current coalition will actually work in practical terms.
Brown’s lasting legacy could be a long and costly one beyond the magnitude of the current deficits – namely the steady destruction of the wealth-generating culture that started in the 1980s and prospered for over 20 years.
Wealth generation is not to be confused with huge bonuses for traders earned off the back of the bull market we experienced for most of the past two decades. It is the creation of successful businesses, profits and jobs and the UK, at one time, had an environment and culture that encouraged this. The tax regime was attractive to both individuals and companies, which meant those that grafted hard and succeeded could retain the financial benefits of their entrepreneurial spirit.
For the economy to start to rebuild itself it needs to go back to being a country for entrepreneurs. The Conservatives need to persuade their partners in power, the Liberal Democrats, that a more liberal tax regime for entrepreneurs is essential to increasing the nation’s tax take and if the two parties can work together to achieve this it will be a coalition to benefit the nation.
The devil will be in the tax detail, but early signs on CGT for businesses looks encouraging, although it is essential the new Government creates a tax regime that encourages both wealth creators – entrepreneurs – to create and profit from their hardwork but also a regime that encourages those at the lower end of the pay scale to benefit.
The LibDem manifesto to remove income tax on the first £10,000 on earnings could be as important as tax breaks for wealth creators. Now is the time for change, let’s hope they can deliver. We live in hope.
