Finance & Leasing Association23 February 2024
Whilst the Westminster bubble’s attention is on scoring party political points, the FLA has published its ideas for an incoming Government. We have focused on three themes, all with a long-term vision.
As my colleague, Simon Goldie, argued last week there has been a political recalibration on green policy not only in the UK but across the Western world. This reflects the politics of the now governed by the economic squeeze faced by households. Nevertheless, the UK’s commitment to be carbon neutral by 2050 is legally-binding. This underscores the importance of UK governments of all political shades to have policies which enable this target to be met. The more there is alignment between administrations, the greater the prospect of investment in emerging technologies. This explains why we have called for roadmaps, investment in infrastructure and fiscal incentives to deliver a greener economy.
Regulation across FLA markets has developed in an unfortunate manner with different types of approaches being layered on one another. With the Consumer Duty enshrining the concept of outcomes-based rules, the new Government has the opportunity to recalibrate the landscape. At the heart of this is rebalancing the relationship between the FCA and the FOS. The cross-party support for Consumer Credit Act reform provides the ideal vehicle for designing a framework that supports innovation and reflects how the modern consumer takes out credit.
UK households’ ability to access credit has been constrained by more onerous regulatory expectations. The FLA is currently working on proposals in collaboration with regulators and stakeholders to develop a proposition for under-served consumer cohorts that have fallen foul of a blanket regulatory approach. We will report in the Autumn.
On the business finance front, we have made it clear that the Recovery Loan Scheme must be replaced, it expires this summer. We have set out how a permanent business finance guarantee would work with a green variant supporting members’ customers as they move to using net zero assets. We also reiterated our call to include leasing in full expensing. We have been working with HM Treasury and HMRC for over a year on this and look forward to the publication of draft legislation to enact this. With a new guarantee scheme and leasing put on a par with other forms of finances in the capital allowances regime, the Government would be promoting investment and growth. Both would be a real boon to the UK economy.
Published 23 Feb 2024
