Was Gordon Brown the true investors’ champion?

The Budget did indeed help small to medium-sized firms by extending until March 2026 the post-Covid recovery loan scheme that makes up to £2m available per business – the £200m extra funding is said to aid 11,000 businesses.

Absent nowadays, however, is the crusade for “wider share ownership” as a wealth spreader that originated with the Liberals before the Conservatives.

The benefits go beyond quoted shares to private companies whose share-owning employees, by receiving dividends, would be incentivised to see the overall firm prosper rather than regard it just as a means to be paid a wage. Something of the kind happened to me just the once but the dividend stream amply justified holding the shares after my involvement with the company had ended.

Gordon Brown took bold initiatives on tax  

For incentivising risk capital, I would put Brown top – or in second place after Margaret Thatcher, who radicalised share ownership.

Brown declared in his first Budget in 1997: “For those who build businesses or stake their own hard-earned money in them, the long-term rate of capital gains tax will be reduced from 40p to 10p in the pound – the lowest rate ever achieved.”

It was a balanced approach, with capital allowances on plant and machinery doubled for one year for small to medium-sized firms.

He then introduced “taper relief” such that the gain liable to CGT would reduce the longer an asset was held, with a 10pc rate on business assets after 10 years. I am probably appreciative of Brown after a holding in Dana Petroleum “10-bagged” over such a timescale – after it was taken over I got the CGT relief. But it was the right thing for Brown to do – it fostered a long-term approach.

His next actions were to shorten the business asset taper to four years to be “more into line with entrepreneurial investment patterns” and to reduce the percentage thresholds for business asset holdings to qualify.

And in 2002 he shortened the minimum holding period for business assets to attract maximum taper from four years to two. I recall this seeming to be a significant incentive to own Aim-quoted shares, which typically qualified, although much care was needed to avoid the tax breaks tempting one into flaky companies.