Finance & Leasing Association14 months into Boris Johnson’s first full term in government, what can FLA members hope for in the remaining three-and-a-bit years? It goes without saying that the urgency of the pandemic has limited the Government’s ability – in the short-term at least – to take forward a comprehensive programme based on the Conservatives’ manifesto commitments.
The FLA’s wish-list for the new Parliament published at the end of 2019 comprised three central themes: reform of the Consumer Credit Act (CCA); Government measures to support the roll-out of green finance to UK households and businesses; and ideas to support small business growth.
The urgency to modernise the CCA was highlighted by the obstacles and legal rigmarole forced on lenders at the outset of the Covid crisis when they were trying to put in place swift and simple ways to help their customers. We worked hard with HM Treasury last Summer to overcome the barriers but it became apparent that only changes to primary legislation would resolve the issues. We are pleased that as everyday life begins to return to normal, the Government has indicated its willingness to work with the industry and consumer bodies to construct a regulatory framework that operates efficiently during a crisis, and which improves the outcomes for individual and business borrowers, including their desire to finance innovative goods.
The 2019 Conservative Party manifesto set out plans to phase out the sale of new petrol and diesel vehicles and to invest in electric buses as part of a wider pledge for the UK to achieve a net-zero emissions economy by 2050. The Government’s Ten Point Plan honours these commitments. Finance companies have a critical role to play in enabling these to happen. We are currently developing a Green Finance Guarantee in concert with the Green Finance Institute, the British Vehicle Rental and Leasing Association and the Zemo Partnership which would see the Government share some of the technological risks associated with financing greener vehicles. In an ideal world, this would be announced in time for the COP26 in November.
The FLA has largely welcomed the Covid-19 business support schemes but one serious shortcoming is the lack of direct backing for independent, non-bank lenders. The Bank of England has in recent months suggested that it may be open to widening schemes’ focus away from purely supporting banks. Ultimately, the most desirable outcome is for the UK’s businesses to have a range of finance options – whether from banks or non-banks – and for the Government to help promote these using existing infrastructure.
So the prospects for the FLA’s political priorities look promising. It’s our job to work with the Government and stakeholders to make delivery of this happen!
Published 25 Feb 2021
