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What’s to like about the UK General Election party manifestos (with an asset and consumer finance bent)

House of Commons

©House of Commons


Fed up with the negative coverage of the political parties battling it out for seats in the House of Commons? 


It’s taken a bit of searching through the manifestos, but here are my suggestions on some proposals from the largest parties that we might all want to get behind (or perhaps not - comments welcome!). 


I’ve picked just one per party for four parties, trying to find specific, practicable and original ideas for a new Government to implement. They are, naturally, focused on points relevant to the asset and consumer finance markets. 


Conservative


Take more companies out of the scope of burdensome reporting requirements. Making use of freedoms granted by Brexit, we will lift the employee threshold allowing more companies  to be considered medium-sized. This is expected to save small businesses at least one million hours of admin per year.


This sensible adjustment was previously announced in March, and includes increasing all three of the micro, small and medium-sized company thresholds. It's useful for some regulation, where different rules apply to different sizes of businesses, but often the same rules apply to all SMEs. 


Making it even better: In addition to this step, carry out a review of regulation for small companies, checking which rules were designed specifically for them. Too often, SMEs must use an adapted version of rules originally designed for the largest companies, for example the recent decision to extend IFRS 16 lease accounting rules from large companies to all SMEs. 


Green


Elected Greens will push for a local-authority-led, street-by-street retrofit programme to insulate our homes, provide clean heat and start to adapt our buildings to more extreme climate conditions.


Up to now, grants and finance programmes to incentivise households to improve energy efficiency and install sustainable energy sources have been limited by both funding available and a shortage of installers. Working through local authorities in this way appears to offer a more scalable solution. 


Making it even better: Arrange finance options for consumers working with specialist retail finance providers, and extend the plans from households to small businesses. 


Labour


Lead the world in sustainable finance by making the UK a global hub for green finance activity, delivering a world-leading green finance regulatory framework, and partnering with the financial services sector to support the decarbonisation of our homes.


This sounds like the original objectives of the Government's Green Investment Bank launched in 2012, and sold to Macquarie in 2017, where it focuses on larger infrastructure projects. Unprecedented amounts of green finance for homes and businesses will be needed over the next ten years, so it makes sense for this to achieved through a partnership between Government and lenders. 


Making it even better: Avoid the trap of limiting 'green finance' to a narrow range of obviously green options, such as domestic solar installations. What's needed over the next five years is predominantly 'transition finance' rather than 'green finance'. That's supporting businesses to redesign their operations to reduce emissions, even if the assets being used might not be manifestly green. 


Liberal Democrat


Expand the British Business Bank to “perform a more central role in the economy to ensure that viable small and medium-sized businesses have access to capital, and enable it to help ‘crowd-in’ private investment, in particular in zero-carbon products and technologies".


This may look odd, as these sound like existing objectives for the British Business Bank (BBB), but in fact the good work of the BBB is currently restricted. The BBB uses public money to do many valuable things but it aims to break even. Equivalent bodies in other countries outside of Europe (where state aid rules get in the way) have a wider mandate, and accept this sometimes comes at a short-term cost to the taxpayer until the businesses supported start to pay taxes. 


Making it even better: Come out and say it - it's time to move away from requiring all BBB programmes to be cost-neutral, to allow the BBB to have an even bigger impact than today.


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Regardless of the results on 4 July, let’s hope these ideas will be be picked up and implemented in some form - they are, after all, complementary in many ways.

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