It certainly wasn't the Budget for you if you were a specialist annuity provider, the immediate victims of the Chancellor's well-guarded secret, if the collapsing share prices that immediately followed were anything to go by.
Normally as a journalist on Budget day, we eagerly await a 'big reveal' but are rarely satisfied. This year was a different story.
Garry White, chief investment commentator at Charles Stanley said while the product providers were clearly hit hardest, overall the Budget was a positive one for pensioners and savers on the whole.
While, as always, the devil will be in the detail as the Treasury likely enters into consultation over the annuity market (still warm from the FCA's microscope) for now, everyone has focused on the headlines.
Biggest pension tax shake-up since 1921
Osborne said: “I am announcing today that we will legislate to remove all remaining tax restrictions on how pensioners have access to their pension pots.
“Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, anytime they want. No caps. No drawdown limits.
“Let me be clear. No one will have to buy an annuity.”
While specialist providers Just Retirement and Partnership Assurance were down around 36% and 55% as the markets closed, three of the largest UK life companies (and oft-preferred financial holdings of UK equity managers) Legal & General, Standard Life and Aviva also tumbled – though to a far lesser extent.
This could be just a knee-jerk blip more telling of the government's improved ability to keep its Red Book under wraps. Or, it could be more fundamental in terms of a reliance on a market which has just heard its own death knell ringing loud and clear.
Either way, the threat to one part of the market opens an opportunity for others – the savers. Hargreaves Lansdown saw its share price rise by almost 15% but the implications are yet to be known fully.
What about the makers?
Housebuilders have been returning to favour for some time now, and the extension of the Help to Buy scheme on new homes until 2020 and the government returning its attention to garden town of Ebbsfleet, for example, will further buoy this space.
But are such initiatives the right ones?
Gareth Lewis, chief investment officer at Bestinvest supports just one.
Is 'Osborne's' recovery sustainable?
First, he is hugely sceptical of the sustainability of the UK economic recovery given the numbers Osborne pitched today, believing Mervyn King's last bout of QE was more to blame.
“There are a number of issues under the surface. Although the Chancellor will claim the recovery as his own, it was actually down to the last round of QE by Mervyn King and the lagging effects there that will have boosted activity.”
He thinks the government has “talked a good game” over its austerity programme but says in reality spending has increased by something like £40bn.
“Either way, the UK economy is going to have to run harder to stay still in the second half of this year,” he adds.
Lewis also believes the “obsession” with the UK housing market is getting a bit out of hand. He says a bias towards making credit more easily available in this space is out of kilter with that available to SMEs and other areas of the market, and this has only worsened since the credit crunch.
He warns of a skewed market where supply capacity needs to be addressed as priority before over-indebted consumers take on overvalued assets to fulfil an initiative, which, sadly, it sounds like may be more about number-fudging.
So back to the makers. A lot of emphasis was put on UK manufacturing yesterday, with a £7bn energy bill carrot dangling before a lot of UK corporates.
Currently responsible for around 10% of UK output, manufacturing is still small fry and I can see why Osborne wants to be able to send out a Made in Britain global message.
While some strong companies exist in the mid 250 space, are they capable of providing the jobs and boosting the economy? More importantly, with all the carrots in the world, with such a strong pound (even a 12-sided one) can the exporters overcome that, really?
Lewis said as Japan and China's policymakers have allowed their currency to weaken in order to stimulate their economies, sterling is still one of the strongest currencies out there.
Held to account
But Murray Rowden, managing director for infrastructure at global construction consultancy, Turner & Townsend, thinks the industry needs to hold the Chancellor to his word and “get building”.
Scratching beneath the surface, he says there is structural promise in Osborne’s word, a promise which may be the catalyst needed to lay the foundations to drive wider development in the UK, accelerating economic recovery.
“But promises have been made before with little or nothing to show,” according to Townsend.
“The challenge for the construction industry now is to hold the Chancellor to account – a plan he may have, but now to deliver. The buck sits with the construction industry, the planners, the local authorities, to get things moving.
“For a construction industry looking abroad, there were also positive signs. With increased support for UKTI and an extra £3bn for exporters are welcome measures as our industry focuses on a global stage.”
And finally
For once, in a thinly-veiled attempt to keep the Scots (those seeking independence) on side, he lauded the power of their whisky industry as he committed to no further rise in spirit duty. A similar attempt at vote-catching went to the West Country's cider producers and beer will now be 1p a pint cheaper.
Betting shops saw their share prices fall after the announcement that fixed odds betting machines would be taxed at 25% (finally recognised as a decent money spinner) – Schroders' multi-manager Marcus Brookes noted Ladbrokes and William Hill as two companies whose profitability will suffer.
Osborne said: “Fixed odds betting terminals have proliferated since gambling laws were liberalised almost a decade ago. These machines are highly lucrative, and therefore it’s right we now raise the duty on them to 25%.”
Yet he signals a revival of the humble bingo hall, with their numbers plummeting in the last 30 years while their taxes remain at 20%.
Bingo duty will now be cut in half to 10% “to protect jobs and protect communities”.
So, there you have it, the Budget Osborne commended to the House, for a more resilient Britain. A Budget for makers, doers, savers, and for bingo.
