The Mansion House address by chancellor Rachel Reeves last night, given the precarious economic situation in the UK and the concerns of businesses over the extra costs included in the Budget was eagerly anticipated. Four business leaders share their opinions
“Improved relations with EU welcomed”
Anna Leach is chief economist at the Institute of Directors
The chancellor announced reforms in her Mansion House address to consolidate fragmented retirement funds, and other reforms that will redirect UK regulators towards better supporting growth. It is encouraging to see that, in addition to the National Wealth Fund capital and the updates to the fiscal structure to accommodate and encourage government investment and to support the National Wealth Fund, further steps are being taken to create an investment-friendly environment. The call for improved trade relations with the EU and the IoD are both welcomed.
The fragility of UK economic growth is highlighted by today’s GDP figures. Reforms which could support long-term growth are at odds with Budget measures that would more quickly and definitely damage employment, investment and growth. We will continue to work with the government in order to make the UK a more competitive place for growth and business, now and into the future.
The UK’s super-sized pension funds may be the answer to our problems
Jonathan Moyes is the head of Investment Research at Wealth Club
“Today we can begin to understand the true vision of Reeve’s plan. Reforming the pension systems of the nation represents an opportunity for the entire country. Reeves could be the spark needed to energize the UK’s economy by taking a page out of Canadian pensions.
The UK’s track record in terms of investment is abysmal. The Institute for Public Policy Research states that the UK has been at the bottom of the G7 league tables for 24 out of the 30 years for investments as a percentage of national income. Some of this failure can be attributed to the pension industry. A cautious approach, especially after the financial crises, led schemes to avoid private investments. This stunted both UK economic growth as well as the size of retirement pots for savers.
Investors in startup companies could benefit the most from today’s news. The UK venture capital sector is a world leader in terms of international performance. However, large institutional investors are needed to help turn startups into scale-ups that can compete internationally. Pension funds in the UK that are super-sized could be the answer. This would attract additional startup capital and make it attractive to investors. Reeves’ Reforms and Pensions Investment Review, in particular, can be transformative for the UK’s economy.
She has acknowledged the need to rebalance UK’s approach towards risk
James Carter is the head of platform products policy at Fidelity.
We are very encouraged by the speech of the chancellor at Mansion House and the detailed content that is included in the documents published, which outlines proposals to reform the defined contribution (DC pension market). It is important to note that the government’s collaborative approach over the summer and its active engagement with the industry has resulted in a set of proposals that demonstrate a true understanding of the UK DC Market. These policies will help to achieve the imperative of improving DC savings outcomes and supporting UK economic growth.
“We’re also happy to see that the government supports a policy that allows for the consolidation of pension schemes in an orderly and effective manner by allowing companies to transfer assets from schemes with low performance. The ability of firms to act quickly and decisively is crucial when consolidating assets in a new pension scheme can lead to better results.
We do believe that the government can increase potential returns to investors and also support companies who are considering listing in UK. Stamp duty could be reduced or removed for equity transactions to put us on an equal footing with the other markets.
The chancellor spoke last night about the evolution of the regulatory environment since the financial crises, and the unintended effects of a system that has tried to eliminate risk taking. We welcome her call for a rebalancing of the UK’s approach to risk, and we look forward to the new opportunities that will be created to better meet the needs of savers.
‘Improve employee value proposition’
Mark Jones, Reward and benefit partner at Isio
“Attracting workers who are not active back into the workplace requires a strategy that is aligned with their needs and expectations. Our research shows that tailored support and flexibility are the key drivers of re-engagement. Employers can create a work environment that is appealing to employees who are returning to the workforce after a period of absence due to health problems, caregiving duties, or personal reasons by offering flexible and hybrid working options.
“We need to improve the overall value proposition of our employees, beyond flexibility. It is important to provide access to programmes of training and development that will help people reskill or upskill in order to make the transition to work easier and more attractive. “Offering comprehensive wellness programmes which address physical and mental well-being can boost employee satisfaction and retention.”
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