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With almost perfect timing, a week before the Prime Minister announced in the pouring rain that he was calling a general election, we held a Chatham House panel event for clients hosted by Polly Toynbee, the renowned Guardian political and social commentator. Our panellists for the evening were Dr Miatta Fahnbulleh, the Labour Party parliamentary candidate for Peckham, James Murray, MP for Ealing North and Josh Simons, Director of the political think tank, Labour Together. Here are some key highlights from the discussion.

Labour is not seen to be on the side of business. To what extent has that barrier been broken?

The panellists told the audience that when they have met businesses up and down the country the overriding message from them is that they want stability, certainty and predictability – and a government they can work with. Rachel Reeves, the Shadow Chancellor of the Labour Party, has said publicly that Labour wants to be a pro-business party working together to keep the economy growing – and the panel said that through its actions, it will prove it. Labour’s central mission is to grow the economy but the panel admitted they cannot do that if they are not in partnership with business. “This is not a political slogan; it is not a tactic. It is just the reality,” said one panellist.

However, the discussion highlighted that its partnership with business should not be short-term. Governments all over the world including Australia, the US, Canada, and Germany have recently won elections because their right-wing opponents have failed. However, it was highlighted that many have struggled since coming to power because they are not delivering material economic improvements to people’s pockets. “If Labour comes to power, it has to mean what it says about forging a ‘real relationship’ with businesses if it is to win [a second term] again,” said one.

Will accepting the same fiscal rules and treasury conventions be a challenge?

The panel were very clear that it believes it is impossible to build a credible offer in opposition without iron-clad fiscal rules. The rules, they said, will underpin everything that it wants to achieve and advocate the changes to enable private sector-led growth; it will form the foundation for getting the economy to grow. “With stability, we will be able to work in partnership with businesses to remove the barriers to investment to invest in the industries of the future,” added one member of the panel.

How confident are you in Labour’s growth plan?

One member of the panel urged the audience not to underestimate Keir Starmer’s and Labour’s commitment to implementing a new way of governing to get the desired results. But the panel are in a confident mood that they have dug into the details beyond the manifesto headline-grabbing policy to make the plan work. “The level of detail is not like what I have seen before,” said one. “There is huge confidence.”

What are you going to do about the Treasury’s black hole?

The panellists are under no illusions that the next government will inherit an incredibly difficult situation should it get a firsthand look at the Treasury’s books. Tax revenues are extremely high – yet Labour has said that it is not talking about or wanting to put up taxes. A panel member said that the NHS and schools will need a more immediate injection of cash and said that Labour will look to close some tax loopholes such as with non-doms, tax avoidance and modernising HMRC. But it goes back to growth. “The only way to get sustainable finances for public services is to get the economy growing,” added a panellist.

Do you think attitudes have changed to be more socially democratic?

All the panellists, to varying degrees, agreed that the attitudes of voters had changed and this has been evident not only by the recent local election results but also by knocking on people’s doors and speaking to them in person. “There is a sense of hopelessness and genuine anger,” said a member of the panel. But there is a bigger challenge that lies in wait. A theme throughout the discussion is that any meaningful change will take more than one term of office. Yet, governments around the world are struggling to figure out what it means to govern responsibly in today’s age. The challenge for Labour will be how, as a centre-left party, it can reassure an electorate that is more willing to switch allegiance very quickly. “That is going to require doing things differently and experimenting,” said a panellist.

What do you hope to achieve in five years, should you come to power?

The overriding hope is that it has raised living standards and that the current housing crisis shows signs of easing. One member of the panel said that its Green Prosperity Plan could be a game-changer. They said that the transition to net zero has to happen and is a real opportunity, creating jobs and growing industries. “If we get momentum and give people hope that we are turning things around, then we have a chance for a second term,” they added.

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Leading Irish jockey, Danny Mullins, offered key insight on the battalion of horses being sent over by his uncle, Willie. The latter will be looking for another dominant week while cementing himself as the most successful trainer at The Festival.

In addition, former jockey and current racing pundit, Jane Mangan, and author of Jumpers To Follow and the Weatherbys Cheltenham Festival Betting Guide, Paul Ferguson, completed the panel.

Watch the full recording below:

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My Prospero and Sacred lead the line for Haggas

Haggas, a multiple Group 1-winning trainer, nominated My Prospero in the Prince of Wales’s Stakes (Wednesday) and Sacred in Queen Elizabeth II Jubilee (Saturday) as his main hopes in the Group races.

Speaking about My Prospero, the Newmarket-based trainer said: “We’ve been very happy with him since the Lockinge. It was a mistake running him at Newbury with hindsight, but actually it’s done him a lot of good.

“A mile and a quarter should be right up his street. He’s a big, strong, powerful horse and I don’t think [any] ground will bother him.”

Sacred has run well at the Royal meeting twice before and Haggas is hoping she can make it third time lucky, despite the trip being a slight concern: “She’s a brilliant filly with a great turn of foot, but she’s a seven furlong specialist.

“We’ve taken the decision to give her run beforehand, which she didn’t have last year, and I just hope she’s sharp enough to take them on. I don’t think it’s the strongest race and I think she’s got a chance.”

The Somerville Lodge maestro has had a quiet start to season but the yard showed signs of hitting form at the opportune time by registering an across-the-card treble at Haydock and Yarmouth on Tuesday.

Lumiere Rock a lively outsider in the Ribblesdale

Kevin Blake, a leading racing journalist and race planner for Joseph O’Brien, believes Lumiere Rock can outrun her odds in the Ribblesdale (Thursday) for which she was a 16/1 chance at the time of writing.

Blake commented: “This has been the target since she ran well in the Blue Wind [at Naas]. Throughout her whole career she has looked like she wants middle distances and there’s definitely scope for her to improve stepping up in distance.

“I think the ground will be fine and I do like this filly. She’s rated 105 but I think there’s potential for a nice bit of improvement over this stiffer test of stamina.”

The Sky Sports Racing pundit also confirmed Joseph was targeting the Kensington Palace Handicap (Wednesday) with three intended runners. He latterly went on to nominate Yerwanthere as his dark horse for the meeting.  Adelaise and Indian Wish are the two others being aimed at the mile contest.

Hoiles hopeful Free Wind can land the Hardwicke

Proceedings were expertly hosted by ITV Racing’s lead commentator, Richard Hoiles. The man behind the mic selected Free Wind in the Hardwicke (Saturday) as his NAP of the meeting and Cash in Queen Anne (Tuesday) as his Dark Horse.

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Psychology of inherited wealth: coping with a sudden financial windfall 

Sudden wealth syndrome isn’t a new phenomenon. Indeed, Charles Dickens’s 1861 novel, Great Expectations, has become a metaphor for what happens to many people who unexpectedly come into a large sum of money today. When protagonist and narrator Pip inherited his wealth, he experienced an egotistical change in his personality as he became consumed by the social expectations of his inheritance.

‘We spent as much money as we could and got as little for it as people could make up their minds to give us. We were always more or less miserable, and most of our acquaintances were in the same condition,’ said Pip.

‘There’s a psychological fear about passing on inherited family wealth’

The novel’s reference is raised by our expert panel during our event exploring the psychology of inherited wealth – be that by intergenerational transfer, selling a business or winning the lottery – and what can be done to ease the burden of sudden wealth. They confront the emotive and complex issues that can arise and discuss potential solutions from inheritance tax planning, to cash flow forecasts to philanthropy.

They note how there is often a reluctance by many families to pass on wealth down through the generations because they believe that younger people are more vulnerable, or even ‘reckless’ when protecting wealth that a family has accumulated over decades.

‘There’s a psychological fear about passing inherited family wealth on. I’ve seen things go very well, and I’ve seen things go not so well. And where it hasn’t gone so well is where there hasn’t been a lead-up – and a family has kept schtum on discussing wealth with their children,’ says Peter Shand, panellist and Partner with Murray Beith Murray, the Scottish-based private client law firm.

‘The business sale event is quite a brutal place when you exit with a pile of cash’

While selling a business can open up insecurities an entrepreneur never knew they had, ‘You fast realise that the business sale event is quite a brutal place when you exit with a pile of cash. It sounds wonderful, but instantly, there’s a pending tax bill, and you are no longer in control as you once were,’ says panellist and Weatherbys Associate Director Nathan Valbonesi.

The panel also debates what makes successful people tick and what makes many wealthy people happy. ‘One of the most fascinating cohorts I’ve come across is the early Microsoft employees, who were all given a huge transition stock and discovered they were all worth about $100 million. One went off to become a professional poker player, another wrote self-help books. Yet, you know, a huge number of them just kept on working at Microsoft, because that’s what they enjoyed doing,’ says Rhymer Rigby, panellist and leading national journalist.

To learn more about the complexities of landing a life-changing sum of money, and on the tips, advice and plans on how to overcome sudden wealth syndrome, click the button below.

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Everyone from Pink Floyd to Abba to The Beatles has penned songs about it too and great interest is taken in how people spend, earn or accumulate their wealth. As Malcolm Forbes, the late publisher of the magazine that bears his family name, once joked, ‘I made my money the old-fashioned way. I was very nice to a wealthy relative right before he died.’ While not the ideal financial planning strategy, his tongue-in-cheek quip does raise the sensitive topic of inherited wealth. For some who inherit a windfall, it goes hand-in-hand with an overwhelming sense of responsibility – and occasionally self-doubt or lack of self-worth – with wealth that has been handed down rather than earned.

Irrespective of how wealth is accumulated, often not enough attention is paid to the thorny issue of how to protect it. This is where a private client lawyer earns their crust. It is a role that can almost incorporate lifestyle training as much as complex legal and tax advice, with most clients needing help in the stewardship of their wealth and how to cushion its impact.

That might sound like a strange thing to say, but certainly, whenever it comes to family inheritances, I am often involved in a stewardship role when relatively young beneficiaries begin to see income or capital released to them. In those scenarios, there needs to be a plan for starting conversations about finance, sooner rather than later, to avoid a situation akin to opening a Pandora’s box. When those conversations don’t take place, it is little different from a lottery winner who has no chance to consider the implications of inheriting a fortune before the life-changing six numbers fall into place.

A serendipitous moment like that can, unfortunately, come at a price, perhaps lending credence to US essayist and philosopher Ralph Waldo Emerson’s assertion that ‘money costs too much’. The cost, in some cases, is a person’s inability to deal with it and there is plenty of research highlighting wealth’s link with addiction, whether that be substance abuse, alcohol or compulsive behaviours, or poor spending decisions.

The lawyer’s role is to help clients, often across generations of a family, understand how to deal effectively with wealth. The Society of Trust and Estate Practitioners (STEP) has an excellent guide Family Dialogues on the Responsible Stewardship of Wealth. It is well worth a read and highlights the importance of – and issues with – family governance, mindful succession and helping younger generations of a family to deal with their status.

As the guide states, ‘surprises are for Halloween’. Therefore, it is important to think early on about the route map for passing wealth down the generations. There are plenty of examples of successful business people who, having devoted their careers to accumulating wealth, are wary of passing this on to children or grandchildren. While the fear of curtailing an adult child’s drive and motivation to succeed in life might play a large part in this, and deter some from tackling succession planning, to avoid the issue altogether is risky.

In our experience, the use of asset protection trusts can provide an effective solution to control the flow and timing of the distribution of family wealth. Trusts are not just for the super wealthy and they have been used for generations as an important way of protecting against common risks such as divorce, family dispute, ill health, the vulnerability of beneficiaries and insolvency. Trusts have, for years, been a mainstay of the financial landscape in the UK – think pension trusts and life policy trusts – and they certainly have a part to play in insulating beneficiaries who might otherwise find themselves vulnerable to the full weight of financial responsibility and the neuroses that go with it.

For some, the next step beyond asset protection trusts could be setting up a family charitable foundation and this is an excellent way of educating the next generation to understand the value of money and the difference between capital and income, not to mention fiduciary responsibilities. Where there’s a family board of charity trustees, it can also provide an introduction to life on a board and a quick route to highlighting what money can do and the positive impact it can have. Our experience, on behalf of clients, is that this can make a real difference and charitable foundations can be genuine success stories.

Whatever the level of wealth, it comes with responsibility, and the psychology and education for clients around how to deal with that successfully often falls to a lawyer or a wealth manager. It is about guiding clients to their desired goal so that they ultimately do the right thing with, and for, their money. If only we could find a singing solicitor to write a tune about that…

Important information

These views are solely the opinions of Murray Beith Murray, a leading Scottish private client law firm, and do not necessarily reflect the views of Weatherbys Private Bank. Investments can go up and down in value and you may not get back the full amount originally invested. Trusts are not suitable for everyone and you should seek professional financial advice before proceeding.

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