Chancellor Jeremy Hunt will today set out a series of “Mansion House reforms” intended to channel tens of billions of pounds of Britain’s pensions savings into high-growth companies.
The Chancellor will use his annual speaking slot in the City of London to set out reforms he claims will seize “benefits of Brexit” and make UK capital markets more attractive.
Mr Hunt will also hail a voluntary compact by some of Britain’s biggest pension companies to commit 5 per cent of their investments to private equity and early-stage businesses, unlocking up to £50bn in funding for start-ups and SMEs by 2030.
The “Mansion House reforms” are expected to simplify rules for buying and selling shares, attempt to boost the amount of stockbroker research on listed companies and ultimately aim to deliver higher returns for investors.
In addition, Mr Hunt is anticipated to announce plans to make share certificates in public companies fully digital, with the aim of making it simpler and cheaper for companies to manage their share registers. He will also unveil a plan to simplify the prospectus documents listed companies have to publish when raising money from investors and will back recommendations to partly roll back the EU’s controversial Mifid II rules, which the UK had an influential hand in drafting when it was still in the bloc.
Responding to the news, investment expert Josh Boer, director at tech consultancy VeUP said: “These radical reforms are a step in the right direction for unlocking investment and turbocharging the economy. Far too many high growth businesses struggle to get investment-ready and with rising interest rates and stubborn inflation dominating the agenda, getting financial backing is a major challenge for many.
“However, unlocking extra investment is only part of the solution, ambitious companies also need to be properly equipped to scale-up rapidly using the latest cloud and AI technology alongside hiring talent and having support to develop their products and services,” added Boer.
Fintech entrepreneur Khalid Talukder, co-founder of DKK Partners said: “At long last we’re seeing some truly entrepreneurial thinking, at a time when fast-growing companies are crying out for extra support. Our economy is built on the success and hard work of start-ups and SMEs going the extra mile, so these changes will help unleash Britain’s potential by unlocking extra investment that is so badly needed.
He continued, “But much more needs to be done to enable these companies to expand and trade internationally, they need better access to the latest tech and payments services as well as key capabilities to tap into the lucrative FX market to reach their full potential.”