FLA unveils long-term recovery plan
The Finance and Leasing Association has published a recovery plan for the economy which calls for a phased approach of short, medium and long-term measures to help the UK become a net-zero, low carbon economy by 2050.
The report, Shaping the UK’s future prosperity: recognising the opportunities for recovery, identifies a route to creating a diverse and inclusive prosperity by levelling up the regional economies of the UK.
It says the short-term imperative is to rebuild consumer and business confidence, and that begins with ensuring that lenders are in a position to lend during the recovery. The FLA is proposing an HM Treasury Forbearance Liquidity Support Scheme to offer funding to lenders to deliver the liquidity they need to help to their customers; an extension of the government guarantees for business and consumer lending until Spring 2021; plus reform of the British Business Investment (BBI) Direct Lending Scheme so that it works for a wider range of specialist funders of SMEs and consumers.
The medium-term focus must unlock investment for core economic growth, so the FLA proposes the reintroduction of the Annual Investment Allowance’s previous £1m limit, with no taper, which it believes would support businesses growth across the UK.
The long-term priority, according to the FLA, must be to improve regulatory regime so that it can provide protection in times of crisis, rather than act as an obstacle to quick and effective solutions for customers in financial difficulty.
The FLA is therefore proposing an overhaul of consumer regulation – specifically the Consumer Credit Act – to make it fit for purpose in the digital age, and to allow for the innovation of new finance products.
Stephen Haddrill, director general of the FLA, said: “The chancellor’s economic statement set out a range of short-term stimuli, but these measures need to be consolidated with substantive plans for long-term growth – and all of this must start with ensuring that the UK’s providers of business and consumer finance are in a position to lend.
“This is not the case at the moment and without their input, the recovery on high streets and industrial estates will stall.
“We have set out a credible plan that puts the UK on a path to a more sustainable and prosperous future. This is the point when businesses will be planning their next move in terms of investing in new equipment to make them more agile – the government needs to ensure that funders are in a position to support these ambitions, and that consumer finance lenders are in a position to support the demand for goods.”
