Queen's Speech: 4 steps to building inclusive and resilient local economies
Responsible Finance have outlined the policies they would like to see included in the Queen's Speech.
At Responsible Finance, our mission has never been clearer or more important. We want to create a more inclusive financial services system to catalyse growth and prosperity in the UK.
No matter what shape the government takes in the year ahead or the outcome of the negotiations with Brussels, local economies in the UK will need to adapt and we need a strong responsible finance industry to help them do it.
Our members empower people who face financial exclusion to take control of their financial futures; helping people start businesses, create good jobs, and enabling families on low incomes to save. This helps build an inclusive and resilient economy and contributes to strong and diverse industries. Importantly, in times of economic change it provides financial flexibility where it is critically needed.
In 2016, responsible finance providers lent £219 million to over 10,000 businesses and social enterprises, creating or protecting over 20,000 jobs. 37,000 people received £20 million in finance and almost 400 homeowners benefitted from £3 million to make essential repairs and energy upgrades – a significant boost to some of the most disadvantaged households in the UK.
Responsible finance is a crucial part of financial inclusion
Ahead of the Queen’s Speech, we are calling on the Government to support the responsible finance sector. We need four key policy changes to help us in our mission to catalyse growth and prosperity in the UK.
- The launch of a £150 million responsible finance fund
This would go some way to addressing the ongoing under-capitalisation of the responsible finance sector. A counterpart $200 million fund in the USA has helped the sector there achieve a $45 billion loan book.
- Fit-for-purpose policy tools
Secondly, policy tools such as tax reliefs and guarantees need to be made fit-for-purpose to catalyse new investment into the sector. In particular, it should be permissible for the Enterprise Finance Guarantee (that reduces the risk of lending to small businesses) to be used alongside Community Investment Tax Relief (that encourages investment in disadvantaged communities).
- Maintain or replace access to EU funding and facilities
The Chancellor has promised to maintain or replace access to EU funding for key economic development projects. It is important for the sector that we avoid this potential cliff-edge, as several EU programmes play a crucial part in attracting commercial investment.
- Proportionate and fit-for-purpose regulation
Finally, we call on the Financial Conduct Authority (FCA) to ensure that rules and regulations really designed for much larger-scale organisations are applied in a proportionate way to our members, while of course still being fit-for-purpose.
What we call for is robust and achievable. It is also incredibly important for the communities, people and businesses who depend on the support of the responsible finance sector, particularly in times of change.
For more information, our manifesto is available here.