On the economy
Tapan Datta, global head of asset allocation at Aon Hewitt said:
“Though public borrowing remains high, the fiscal straitjacket is starting to look a little less tight for the Chancellor. The economy has been growing for the past two years and that is finally starting to help tax revenue collection. Low inflation, helped by cheaper crude oil, is also helping public finances. Though the monthly deficits are still very large by any measure, they are coming in a little lower than earlier estimates.
"All this may just be giving the Chancellor the leeway to offer a few modest giveaways in this pre-election Budget – and without endangering the declared target of eliminating the deficit in the next five years. It will not upset the gilt markets or sterling if the Chancellor announced some tax cuts.
“Nonetheless, he will be the first to be aware that the longer term fiscal challenges remain daunting. Modest tax giveaways may be the story for this year, but the longer-term budgetary picture highlights the need for continued frugality. All this means that the seemingly relentless squeeze on public spending is unlikely to be eased.”
On employment
Dominic Christian, chief executive officer of Aon UK Limited and executive chairman of Aon Benfield International, said:
“One of the most encouraging measures in December’s Pre-Budget Report was the Chancellor’s continued recognition of the importance of apprenticeships to the UK economy. We would be delighted to see that commitment continued with further Government initiatives to support this key source of opportunity for the young.
“As a global firm, headquartered in London, we have been fully committed to growing the number of apprenticeships since we launched our own scheme in 2012. Now in its third year, we have 33 apprentices and we plan to double this number.
“We have led our industry as part of the Government's Trailblazer Programme because we believe that apprenticeships are key to building our future economy and offer an important alternative pathway to develop a career. Apprenticeships can engage and inspire young people and any supportive measures that can make them even more attractive to both employers and the young, have to be to the long term good.”
On the UK reinsurance industry
David Ledger, chief executive officer Aon Benfield UK and chief operating officer Aon UK Ltd, said:
“London has the world’s oldest and largest insurance market, in which many of the industry’s most knowledgeable and experienced practitioners operate. This centre of expertise represents a core function of the City of London and the UK economy, and it should not be hindered by out-of-step regimes that dampen its competitiveness.
“We therefore welcomed the Chancellor’s decision, announced in the Pre-Budget Report - to explore options to ensure that the UK’s regulatory and tax regime for reinsurance is as competitive as possible, and look forward to the findings of Michael Wade’s review, which we hope will contain some robust recommendations on the steps necessary to bolster London’s position as a world leader.”
On the UK retirement industry
Michael Clare, UK director of Aon Hewitt, said:
“We are still seeing the effects of the huge changes to the UK pensions system announced in the Budget last year. The key date of 6 April, when those changes come into action, is currently looming large for all those involved in the industry.
“While we would not rule out the possibility of further changes to pensions after the election, for the moment we would ask for a period of stability on pensions tax and some certainty on future annual and lifetime allowances. Most of all, we would hope that rather than introducing further significant changes, there will be sufficient time allowed for the measures announced last year to be to be properly settled in and to work correctly.”
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