Rathbones has urged the Government to do more to protect businesses and individuals that drive economic growth.
The wealth manager has called upon the Chancellor to use the upcoming Budget to foster aspiration, arguing that a bold investment-led approach is needed to break the cycle of weak growth and rising tax pressures.
It warned of rising anxiety among professionals, business owners and families as speculation mounts that the Chancellor will raise taxes.
Camilla Stowell, CEO Wealth at Rathbones, said: “Our clients are the people whose ambition and success underpins the prosperity of businesses, organisations and communities across the UK. If they aspire and succeed in their professional lives, businesses and personal decisions, the whole country stands to gain. But many now feel anxious about the future, worried about their ability to live well in retirement, support their families, or grow their businesses.”
“We worry that the Government may lose sight of the need for aspiration, and to support and encourage people to strive, build and succeed – because this is how the economy and country will succeed and grow. Short-term tax changes which undermine this may ultimately further slow economic growth.”
Rathbones has set out five steps it said would help to drive growth. Firstly, it has called upon the Government to boost investment through the pension system and avoid cuts to higher and additional rate tax relief. It estimates that reductions could reduce pension saving from higher-rate taxpayers by over £50 billion over five years.
Secondly, it has called for more generous capital allowances and a reformed business rates system to encourage entrepreneurship and investment.
Rathbones argues that the Government must also do more to support regional and sectoral investment, particularly in transport and energy infrastructure to address regional inequalities and high energy costs.
Additionally, it has urged the Government to resist further takes on wealth, warning that proposals for a wealth tax act as a “major disincentive” for highly mobile business owners and professionals to come to or remain in the UK. According to its estimates, an annual wealth tax could drive over £100 billion out of the UK or into less productive assets.
Finally, Rathbones believes more should be done to invigorate the housing market. Abolishing or reforming stamp duty land tax and other taxes on housing could increase household mobility by over 25%, it said.
Stowell added: “It’s not our role to resolve every economic challenge, but as one of the UK’s leading providers of wealth management, we have a duty to give voice to those who are building the country’s future. We urge the Chancellor to focus on policies that encourage aspiration, investment and growth.”
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