Spectre’s First Budget

Ian Spectre, professional Hector, is back for 2021 and he’s prepared a budget! If you’ve not been formerly introduced to Ian Spectre, you might find it helpful to read this introduction before you continue on to see what he’s cooked up for the Budget.

Nadia Petrovic was born in Moscow in 1987.  Her father became a Russian oligarch in the early 1990’s and the family relocated to London in the mid 1990’s.  On her 18 birthday, Nadia rejected everything her father stood for and became an environmentalist.  All she kept from her past life was her Mayfair penthouse, her Lamborghini Countach and her Swiss bank account. As she had said at the time, “a girl needs some basic necessities”.  In 2008 Nadia went to Glastonbury.

 

*****************************

 

In 1980 Sven Sounbak facing persecution in his native Sweden fled to the UK and settled in Milton Keynes.  In 1982 he married Sophie, the daughter of a furniture maker and started working for his father in law.  He spotted a niche in the market for mail order and the business rapidly expanded.  By 1985 Sven had taken over the business from his father in law and both men were millionaires.  Sven never looked back. Also in 1985 Sophie gave birth to Richard.

 

*****************************

 

Richard Sounbak passed the entrance exam for Eton.  Sven had made a generous donation to fund essential building repairs.  Shortly before Richard’s 16^th birthday, Sven had made an investment in an Examination Board.  Richard left Eton with top grades in four “A” Levels and went up to Oxford to study Economics and Politics.  At the same time Sven helped fund a Centre of Excellence at the university which was dedicated to tackling disease in Africa.

After graduating from Oxford in 2006 with a double first, Richard took a job in Sven’s business. With encouragement from his father, Richard joined the local conservative party.  He became very popular, especially at the bar.

In early 2008 rumours circulated that the sitting MP Sir David Rushe had been seen with Call Girls.  Photos were sent to local committee members.  A meeting was called and evidence was put in front of Sir David.  Is was agreed that it would be in everyone’s interests if Sir David stood down at the end of the current parliament.  None of the photos were ever released.  Encouraged by this, Richard agreed to stand and in May 2008, he was the prospective conservative parliamentary candidate for Greater Chiltern.  On 27 June 2008, Richard went to the Glastonbury festival.

 

*****************************

 

Richard and Nadia met on 28 June 2008 while watching Jay-Z on stage.  There was an instant attraction followed by a whirlwind romance.  They married a year later.

2010 was a good year for Richard and Nadia.  In April, Nadia gave birth to twin girls tastefully named Peaches and Cream, and in May, Richard was elected at the MP for Greater Chiltern.

Sven took a keen interest in his son’s political career.  He regularly entertained ministers and funded good projects.  Richard was well liked by politicians and the media.  He was always immaculately dressed in public and when he spoke in parliament on behalf of his constituents, he won the respect of MP’s on all sides of the House.

Try as he may, Sven found himself unable to persuade successive prime ministers to promote Richard to a ministerial position.  His break came early in 2020 when he was entertaining the new Prime Minister.  Over brandy’s, the PM was bemoaning the fact the Chancellor was too clever by half and was openly defiant.  Sven suggested sacking the Chancellor and appointing Richard.  This was a lightbulb moment for the PM and one week later, Richard Sounbak was Chancellor of the Exchequer.

 

*****************************

 

Ian Spectre has been very busy throughout 2020.  The Prime Minister had summoned him to No.10 shortly after the disastrous 2019 budget.  “Look” said the PM “this pandemic threatens to wreck the UK economy, millions of jobs are at risk.  I need you to come up with a plan.  Money is no object, I’ll borrow whatever we need.  Just come up with a plan.  Oh, and when we’re back to normal, I want you to work out a way for us to re-pay the debt.”

Spectre worked tirelessly over the coming weeks, firstly coming up with the Furlough Scheme and the Self-Employed Scheme Income Support Scheme and following that with a number of variations to be used if the pandemic was not quickly over.  He included subtle differences in each variation.

His thoughts then turned to Edward Peters and his clients.  These customers provide services through limited companies but draw dividends instead of salary and so avoid having to pay National Insurance. “What should I do for them” Spectre thought to himself “I’m supporting working people who are employed or self-employed” he thought on. “Dividends are investment income, I’m not doing anything for them”.

 

*****************************

 

The months passed, the pandemic ebbed and flowed, and Spectre’s schemes (all of which were credited to Richard Sounbak) received widespread praise.  And so in February 2021, Spectre found himself in a meeting with the PM “Look Ian, we have a budget to prepare and we’ve set budget day for 3 March.  Richard can deliver it, but because of the fiasco last year, I can’t let him write it.  To be honest, the only reason he has the job is because of the money and influence of his father.  So I want you to prepare it.  We need a plan to recoup the £350 billion we’ve laid out and we need to be well on the way to getting the books balanced by the time of the next election.  And remember, we’ve given a cast iron guarantee not to raise the rates of income tax, VAT or National Insurance.  Now come back and see me one week today with your budget and after I’ve looked over it, you can pop next door to present it to Richard”.

 

A week later Spectre arrived at No 10 and was greeted by the PM.  He handed over a copy of his budget.

“So, talk me though this” the PM said.

“Well, I’ve changed very little really” Spectre said “I’m freezing allowances and thresholds until 2026 and I’m raising the rate of corporation tax from 19% to 25% to take effect in 2 years”

“Ok” said the PM “but you’re leaving the rate at 19% for companies with profits of up to £50,000.  Doesn’t that exempt 70% of companies?”

“Exactly!” Spectre replied “70% of companies will still pay 19%, but the other 30% are responsible of 90% of the corporation tax paid.  This will raise £15 billion a year”.

“Excellent” the PM replied “but tell me about this Super Deduction for Capital Allowances, how much will this cost us?”

“Nothing” Spectre replied.  “It’s a con to encourage companies to invest in plant now rather than wait.  If a company invests £100,000 in plant in the next two years the normal tax savings at 19% would be £19,000.  The Super Deduction increases the savings to £24,700.  But if they wait two years the tax savings at 25% will be £25,000”.

“I like it!”  But where else are we raising money?”

“You’ll see I’ve put aside £350 million for HMRC.  I’m going to use that to incentivise tax officers to challenge each and every Furlough and SEISS claim.  I made these easy to apply for but at the same time kept changing the complex eligibility criteria.  I estimate that we’ll claw back a third of our outlay and for those customers who’ve got it wrong there will be a penalty of up to 100%”.

“And where’s the £350 million coming from?” he PM interjected

“From the pay rise promised to the nurses” Spectre replied.  “If I may move on”, Spectre continued “Freezing allowances and rates for four years will bring in £10 billion.  Then there’s savings in the state pension.  The pandemic has resulted in the premature deaths of 100,000 people over the age of 65.  The average state pension is £10,000 per annum so there’s £1 billion a year there.  Plus of course we’ll pay a lot less to care homes and generally we’ll make savings on the NHS budget”.  And finally, of course, there’s a one off IHT bonus”.

“Excellent” said the PM.  “Now pop next door, Richard is expecting you.”

 

Spectre entered No 11 with bowler hat and a matching face mask.  He was greeted by a receptionist who offered him a drink

“Strong tea with one sugar” Spectre said.  The receptionist went off and returned a few minutes later with a cup of tea and let him into the Chancellor’s office.

“HEY MAN! Ian isn’t it?”

“Yes Chancellor” Spectre replied.

“Call me Richie” the Chancellor said in a slightly slurred voice.

Spectre noticed an odd smell and then saw something smoldering in an ash tray.

“Don’t worry about that” the Chancellor said, “It’s only tobacco that you’re not allowed to smoke in workplaces”.

Spectre sipped his tea without realising that he hadn’t removed his mask.  Continuing to look round the office, Spectre noticed that on the wall behind the Chancellor, there were large posters.  One of Mick Jagger and the other Jimi Hendrix.  Both looked like they dated back to the 1960’s, in between them was a framed photograph of the Monarch.

“SHE” the chancellor said “She had a famous rock group named after her.”

Spectre handed the chancellor a copy of the budget and sat silently while the Chancellor read it.  Every few minutes the silence was broken with “COOL” or “AWESOME”.  Finally the Chancellor looked up at Spectre.

“OK, I get it, but there’s just one thing I don’t understand.  If we’re trying to bring in money, why are we allowing companies to carry back losses 3 years?”

“Obvious” Spectre replied, “If we let them carry it back, they get relief at 19% whereas if it is carried forward, it might be relieved at 25%”.

“WICKED” the Chancellor replied.