Investment industry welcomes chancellor’s economic growth plans

The UK trade body for the investment management industry has said it “strongly supports” the chancellor's plans to drive economic growth across the nation.

The Investment Association (IA), which represents 250 firms that collectively manage £8.8 trillion worth of UK assets, says that the industry is ready to work with the new government to help support the economy.

“Investment is the engine of economic growth, and our industry supports the government in finding innovative ways for more capital to be channelled into thriving British businesses and infrastructure projects,” said Chris Cummings, chief executive, IA. “Removing blockers in the planning system will be key to this."

He went on to say that it is vital that the UK opens straightforward ways for pension funds to invest in housing, transport and energy projects by removing regulatory obstacles and "overturning the culture of 'safetyism' that has curtailed economic growth."

The comments come after Rachel Reeves made her first speech as chancellor on Monday, in which she criticised what she described as the “legacy of 14 years of chaos and economic irresponsibility”.

She also announced a new approach to growth focusing on three pillars: stability, investment, and reform, as well plans to launch a new National Wealth Fund (NWF) with a remit to invest in and catalyse private sector investment in new and growing industries.

The chancellor also revealed new Treasury analysis which she claimed shows that had the UK economy grown at the average rate of other OECD economies over the past 13 years, it would have been more than £140 billion larger.

"After 14 years, Britain has a stable government," added Reeves. "A government that respects business, wants to partner with business, and is open for business."

But some firms have expressed concerns about the introduction of a new NWF.

Naureen Zahid, director of investor relations at early-stage venture capital investor OpenOcean, said that there is a "striking similarity" between the fund and the UK Infrastructure Bank (UKIB.) She warned that this raises questions about the "efficiency and purpose" of the NWF.

"Labour must distinguish the two, whether through rebranding the UKIB, establishing the NWF as a subsidiary, or consolidating multiple public bodies," continued Zahid. "Investors need to see that this fund isn’t merely a rebadged version of existing structures, but a genuine new tool for economic growth that can deliver returns worthy of their investment.”

The IA, which hasn't yet commented directly on the new fund as it waits to see more details about the policy, also wrote to the new chancellor setting out several areas for the industry and government to work together on.

These included channelling productive capital into more thriving British companies and infrastructure projects; building financial resilience by enabling more people to invest to secure their future; and ensuring that more high value investment management business is done in the UK.

Image credit: HM Treasury

Share Story:

Recent Stories

Safeguarding economies: DNFBPs' role in AML and CTF compliance explained
Join FStech editor Jonathan Easton, NICE Actimize's Adam McLaughlin and Graham Mackenzie of the Law Society of Scotland as they look at the role Designated Non-Financial Businesses and Professions (DNFBPs) play in the financial sector, and the challenges they face in complying with anti-money laundering and counter-terrorist financing regulations.

Ransomware and beyond: Enhancing cyber threat awareness in the financial sector
Join FStech editor Jonathan Easton and Proofpoint cybersecurity strategist Matt Cooke as they discuss the findings of the State of the Phish 2023 report, diving into key topics such as awareness of cyber threats, the sophisticated techniques being used by criminals to target the financial sector, and how financial institutions can take a proactive approach to educating both their employees and their customers.

Click here to read the 2023 State of the Phish report from Proofpoint.

Cracking down on fraud
In this webinar a panel of expert speakers explored the ways in which high-volume PSPs and FinTechs are preventing fraud while providing a seamless customer experience.

Future of Planning, Budgeting, Forecasting, and Reporting
Sage Intacct is excited to present FSN The Modern Finance Forum’s “Future of Planning, Budgeting, Forecasting, and Reporting Global Survey 2022” results. With participation from 450 companies around the globe, the survey results highlight how organisations are developing their core financial processes by 2030.