Urgent Rachel Reeves Mansion House speech comment from leading audit, tax and business advisory firm, Blick Rothenberg
Mark Cunningham, a partner at the firm, said: “Rachel Reeves speech showed a clear push to get more people investing in UK companies. However, it is uncertain how much support will actually reach small and medium sized businesses.
He added: “While the chancellor announced initiatives like the upcoming PISCES private share trading platform, Long-Term Asset Funds, and a new concierge service for overseas investors, the impact of these new initiatives on small and medium sized business is uncertain. Most of the retail investment drive is focused towards larger, listed companies. That’s understandable given the risk appetite of everyday investors, but it means that the investment is unlikely to flow into smaller busineses that are driving growth across the UK.”
Mark said: “Crucially, Rachel Reeves made no mention of reforms to the Enterprise Investment Scheme (EIS), Seed EIS or Venture Capital Trusts, all of which are important tools for encouraging higher risk, early-stage investment. This appears to be a missed opportunity. Updating these schemes, by raising company and investor caps, relaxing sector restrictions (such as including property development in some form), and improving liquidity could go a long way toward bringing in more funding for growth focused SMEs.”
He added: “If the government wants to achieve sustainable growth they must make sure smaller businesses are not forgotten.”
Tomm Adams, a partner at the firm, said: “From a pensions and savings perspective the chancellor has only hinted at future reforms to ISAs she is considering, suggesting that she may yet pursue the unpopular measure of reducing investment allowances in Cash ISAs as she encourages the nation’s savers to gamble on the stock market.”
He added: “Rachel Reeves reconfirmed commitment to the Mansion House Accord of last year. A focus on value creation for pension savers is welcome, but I hope she doesn’t crash the real value of pension savings through further punitive tax measures in October.”
Robert Salter, a director at the firm, said: “While Rachel Reeves claimed credit for the 4 cuts in Bank of England interest rates in the last year, one of the impacts of her decision to increase employer National Insurance Contributions (NICs) is that it has helped push inflation back-up (ca. 3.5% currently).”
He added: “There is a significant risk that the increase in inflation will diminish the Bank’s ability to reduce interest rates anymore over the coming months, as the Bank’s core focus is always on controlling the rate of inflation.”