A busy start to September
08 September 2021
By Stephen Haddrill, Director General
A busy start to September
It may still feel like summer this week, but Autumn is already here bringing the usual surge in meetings, priorities and deadlines. Westminster is no exception. Parliament is meeting face to face for the first time since the pandemic began and so is the Cabinet.
We can expect business to be intense and the tone of debate to be feisty. Over the coming months, the Government wants to shift its focus to issues beyond Brexit and Covid – but will have to do so under the close scrutiny of some rebellion-prone Conservatives who are keen to see that the Government sticks to its Manifesto. Meanwhile, the Labour leadership also needs to make its mark.
The Government has kicked off with a big bang – commitments to increase National Insurance to fund social care reform and to pump money into the NHS over three years to compensate for the impact of Covid are huge and controversial. Many of its own supporters will challenge the tax hike, fearful that it will not be reversed once the NHS is back to normal. They are unlikely to be numerous enough to overturn the Government, given its a large majority, but they will raise the temperature nevertheless.
Social care and the NHS may be the biggest ticket items but there are many more. The Chancellor has an extremely difficult Budget to launch in October. In education, transport and the courts, Government needs to tackle the challenge of post Covid catch up. The Universal Credit uplift will be a hotly argued topic. A White Paper on levelling up is also promised, and a successful conclusion to COP26 needs to be delivered.
All of these are difficult issues. Money is short. Some policies conflict with each other, such as net zero and levelling up. Some are out of the Government’s control. At the moment, it is not certain that China will even turn up to COP26.
What does this all mean for business and financial services?
On the positive side, the Government must stimulate the economy and keep the revival going. Without growth it will not be able to fund any of the things it wants to do. We can hope therefore that it will also stick to its promise of reforming regulation to make it more efficient for business, although the weight of the Government agenda may mean the things business want get squeezed out of the Parliamentary timetable.
On the negative is the sheer level of uncertainty that business faces. The most obvious are the key economic factors such as inflation and taxation. Political uncertainties are harder to assess but need to be considered: if COP26 is a failure, will the Government maintain its commitment to net zero; will the Conservatives of the South lose patience with the costs of investing in the North; and, for all of us in business and financial services, will our vital role in the economy remain appreciated as Government works to define its profile as a champion of change and social reform.
On this last point, the FLA has much to say. Credit is a powerful engine of our economy and society. Lending must be responsible and affordable. Regulation and industry best practice have made great strides in this respect. In consequence, credit can be a trusted means to tackle many of the issues that Government faces. It drives business investment and innovation, needed now more than ever. It helps the less well-off to manage their budgets, and it will be absolutely vital to the Government achieving its net zero ambitions because it puts green options, be they electric vehicles, new boilers or home improvements, within the reach of more consumers. In the intense debates that we can expect over the coming year, we urge Government to recognise our industry’s contribution, and to listen to our ideas about how we can do more.
12 May 2021
The last week has seen the Government consolidate its position as a result of the biggest ever set of polls, whilst the Opposition has fallen into internal strife.
03 Mar 2021
The FLA has called for support for business to be maintained through the crisis and for the restoration of public finances to be phased in gradually.
24 Feb 2021
This is one of the hardest budgets to predict of recent times because the range of possible economic scenarios for the rest of the year is itself so wide. And, unlike some of his predecessors, the Chancellor has floated nothing of significance. But the ink must be nearly dry. Today, the OBR will start its work on assessing the soundness of the proposals. The rest of us have another week to wait.
05 Jan 2021
As we embark on a new year, much of the news about Covid 19 and the economy is bleak - infections are rising and economic growth has stalled. However, our situation could have been so much worse without two things: the gift of the vaccine; and the agreement of the trade deal. They give us all the chance for cautious optimism that the recovery will start properly in the year ahead. But whether that turns into real future prosperity depends on the decisions taken by Government and businesses in the next few months. So what should we now expect from the Government in 2021?
08 Oct 2020
Earlier this week the Treasury announced revisions to the legislation which prescribes how default notices issued by lenders should be written. This is a step forward. For too long, the law has required lenders to use language that is threatening in tone and does not reflect the mutually respectful relationship that lenders seek with borrowers.
It might seem churlish therefore to complain, but the truth is that the announcement has only scratched the surface of what needs to be done to reform consumer credit legislation.
17 Sep 2020
The Chancellor is working on the shape of his Comprehensive Spending Review and Budget to determine what the Government can afford to spend and how spending should be allocated at a time of the greatest uncertainty. The pandemic is placing huge pressures on him to keep the taps open to maintain economic recovery. At the same time, his ability to raise taxes to pay for this largesse is severely constrained for the same reasons. There will be a gap in the country’s finances, and it may have to be met by borrowing. Fortunately, interest rates are low, and the Government remains credit worthy. It can afford to ease the pain of business and individuals through the winter.
21 Aug 2020
Now more than ever Government needs to avoid becoming trapped in the here and now. It must show anticipation and vision. That is not at all easy given the need to tackle so many short term problems against a backdrop of uncertainty about what the next months will bring. So it’s good that major long term priorities such as net zero, raising productivity and levelling up across the country are still being addressed. These are goals that the FLA wholly supports and we look forward to the coming spending review showing vision in taking them forward...
20 Jul 2020
We stand at a fork in the Covid road. In one direction the virus fades away, business opens further and economic recovery gathers real momentum. In the other, we bounce from lockdown to lockdown, with millions losing their livelihoods and the economy remaining in the doldrums for years.
01 Jul 2020
Hardly a year goes by without the role of regulation in the economy being reconsidered.
04 Jun 2020
We are great spenders. Consumption is the lifeblood of the British economy.
20 May 2020
The Coronavirus crisis is often described as unprecedented, but the effects on people of an abrupt change in circumstances, such as loss of income, are all too familiar – uncertainty, anxiety, and the fear of being overwhelmed.
27 Mar 2020
In numerous conversations with Government, we have been very clear that the tools used to support the banking sector in 2008 are too narrowly focused to support firms of all sizes, in every sector of business, across the whole of the UK economy in 2020.
11 Mar 2020
The Chancellor has delivered a budget for business, whilst extending a helping hand to people threatened by Coronavirus.
06 Mar 2020
International Women’s Day, which falls this weekend, is a great moment to stand back and reflect on whether we are doing enough on diversity and inclusion.
17 Feb 2020
The pace of technological innovation can at times seems daunting, but technology is simply a means to an end, not an end in itself.
06 Feb 2020
The Government’s decision to bring forward the ban on selling new petrol, diesel and hybrid cars from 2040 to 2035 will require the concerted efforts of politicians, regulators, manufacturers, lenders, utilities and planners to make it achievable.
22 Jan 2020
Lending to small and medium businesses has been falling for some time, especially outside the South East. It has been suggested that this shows SMEs are cash rich but unwilling to invest. There is some truth in both statements. But there is also a ray of hope if we look beyond the use of conventional borrowing and overdraft facilities.
16 Jan 2020
During his time as Governor of the Bank of England, Mark Carney has been a leading voice in encouraging policymakers, business and investors to recognise the key role of markets, financial and otherwise, in tackling climate change.
13 Dec 2019
After the turbulence of recent months, we now have a Government with a mandate to govern for a full term – and the numbers to get business through the House of Commons.
That list of business is very long, and of course begins with negotiating a rather tricky post-Brexit trade deal, not to mention a brewing storm about the unity of the UK. As strong as the SNP are in Scotland, their influence in Westminster has been blown away by the size of the Conservative majority. And what about unity more generally? Some basis for co-existence between leavers and remainers needs to be found.
So, what are the implications of the General Election results for the financial services sector and FLA members in particular?