Great Expectations

Amidst all the fiscal details that comprised last week’s Budget announcement by Chancellor Rachel Reeves, was an unexpected lesson for communications professionals in expectation management. As legal PR’s, we’re always attuned to the comms side of announcements, how they’ve been crafted, and, how they’ve landed.

This Budget was more hotly anticipated than normal given the recent change in government and an expectation that the touted £22 million deficit left by the Conservatives, was going to need plugging somehow. How, was the question on everyone’s lips.

Making taxes palatable

Introducing significant economic changes is going to create a unique communications challenge for managing public expectations effectively. This Budget included an increase to Capital Gains Tax (CGT), a substantial rise in National Insurance rates for employers, and increases in the National Living Wage amongst others. Such measures, intended to stabilise finances and fund public services like the NHS, are going to hit businesses, the task was how to communicate these so as not to alienate the electorate.

One of Labour’s tactics on this front, as it turned out, was to ensure that what was trailed in the weeks leading up to the announcement, was far worse than what transpired on the day. Hannah Prevett, wrote about this in The Times Enterprise Network, speaking to entrepreneurs who agreed that what they felt was ‘relief’ at the 24% CGT increase, instead of the feared 38%. Quite a feat for a government to increase taxes, and to create ‘relief’ among those affected. However, the impact of the CGT increase is not insignificant by any means, Bishop Fleming, an accountancy firm, provided an example, which showed that if an entrepreneur completed the sale of their business on the 30 October for £2 million, they would have had a £300,000 CGT bill. If they sold on the 31 October, they would pay £380,000. If they sold after April 2025, they would pay a much heftier £420,000 in tax. Yet, ‘relief’, apparently.

Giveth and taketh

Effective expectation management in communications involves transparency about objectives and an honest discussion of potential impacts. For example, raising employer National Insurance contributions aims to boost public funding but will be a strain on businesses, especially small enterprises. Organisations such as the Federation of Small Businesses have already voiced concerns about the potential negative impact on hiring and operational costs. But the government had a card up its sleeve for this, and to address these concerns, they emphasised the relief measures included in the Budget, such as increases in the employment allowance, which should alleviate some of the burdens for smaller employers.

For communications professionals, these reactions underscore the importance of managing expectations thoughtfully. When an announcement could have wide-reaching implications, it is essential to focus not only on clear communication but also on understanding and addressing specific concerns within different audience segments.

Lessons learned

Communicators across sectors can learn from this approach, especially when handling complex topics like the law, finance or technology. Of course, we can’t trail fake news for our clients, to soften the blow of the real bad news to come. However, being realistic with our clients about how any announcements may land with their intended audiences, what fallout there may be, how any concerns stakeholders may have can be addressed and of course, ensuring that ‘bad news’ is communicated and doesn’t fall into a ‘let’s bury our heads in the sand’ strategy is key.

Ensuring that messaging is transparent, backed by data, and directly addresses the primary concerns of stakeholders can help prevent misunderstandings and build trust. In a world of information overload, making complex ideas accessible is crucial for any effective communication strategy.

The Autumn Budget revealed a clear lesson for comms professionals: to build a strategy that pre-empts potential worries by identifying and addressing key issues head-on. In doing so, businesses and communications professionals alike can foster a supportive, trust-based relationship with their audience that can weather the uncertainties inherent in business and the economy.

By keeping this in mind, companies can not only navigate complex landscapes but also reinforce their commitment to transparency and accountability.

Photo credit: Rachel Reeves ©House of Commons