5 things the AIC wants to see from next govt

The trade body has set out its wishes after the prime minister's decision to call a general election on July 4. 

Chief executive, Richard Stone, said: "The incoming government will have a long to-do list. Whilst the detail may vary there is cross-party agreement that the country needs significant investment in infrastructure and public services and that will require private capital from investors.

"We trust that the next government, whoever that is, will value the role investment companies play and will continue to work with us to deliver even more for UK investors and the economy."

The AIC set out what it sees as the key five priorities: 

1. Reform of financial services regulation

The AIC is urging the government to priorities resolving issues with investment cost disclosure. 

Stone gave Pripps, Mifid and AIFMD as examples of regulations which need to be updated.

He said there is an "urgent need" for the government to set the boundaries for regulation before passing them on to the Financial Conduct Authority. 

2. Supporting the UK’s growth businesses

In Jeremy Hunt's Autumn Statement in November, the VCT and EIS sunset clause was extended until 2035. 

Stone welcomed this having cross-party support but said it requires EU approval before April 2025.

He said this should be a top priority for the next government as the schemes play a vital role in filling the capital gap or early-stage and growth companies. 

3. Reinvigorating the UK’s equity markets

Stone called stamp duty a tax on the market's liquidity. 

He said abolishing this tax could signal the governments intent to get capital markets moving.

"At the least, this should be removed from the trading of investment company shares where there is double taxation and an unfair disadvantage relative to open-ended funds," added Stone. 

4. Isa reform

In March, the government announced its intention to launch a UK Isa, which the chancellor said would see an additional £5,000 allowance created which would be invested in UK assets. 

Stone raised concerns the proposals would potentially exclude UK-listed companies, including investment companies.

He added: "This misses the key objectives of driving an investment culture, supporting the UK equity markets and their related infrastructure, and encouraging companies to list and seek capital in the UK."

5. Pension reform

Another area where Stone thinks there could be more focus on investment in UK assets is through pension funds. 

"The current government has started this process by requiring increased disclosure, hoping this will lead to public pressure to invest more domestically," said Stone.

"We do not believe compulsion is the way forward but neither is reinventing the wheel. Investment companies, tried, tested and proven, are the perfect vehicle to help channel investment into illiquid assets in the UK such as infrastructure, renewable energy and private equity."

tara.o'connor@ft.com

What's your view?

Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com