Reeves has just allowed the City to foist its undesirables upon the rookie investor
Rather than a thoughtful series of proposals to steadily draw us from our shells, build confidence in the face of a daunting system and allow us all to take greater control of our financial futures, in her Mansion House speech the Chancellor has offered us up as sacrificial lambs.
Sensing Downing Street's desperation in its attempts to divine growth, the City has taken the opportunity to foist its undesirables upon the retail investor, hoping a combination of greed and ignorance is potent enough to leave us all holding the bag.
When Sir Keir Starmer declared the UK would be 'open for business' under his Labour government, he failed to mention that would come at the expense of everyone else.
I agree with core principles of the Government's strategy. A competitive regulatory environment is important. We should harness the UK's global leadership in financial services – building a retail investment culture is a good idea.
But it appears that once the Treasury had its subheadings, it allowed the City to fill in the blanks and forgot to mark its homework. More than ever, the devil is in the detail.
Rather than making it easier for us all to invest in the highest quality, most liquid stocks, the reforms will instead lower the requirements for flogging us hard-to-sell, difficult-to-value assets.
An easy reform would have been Isa simplification, allowing us all to invest in stocks and save cash within the same product. Instead, they have brought the long-term asset fund (LTAF) into the stocks and shares Isa, and promised banks they can send us notifications to buy shares sometimes.
The LTAF is a product largely invented to allow pension funds to invest in private markets and infrastructure assets, the sorts of investments that require you to stay put for 20 years or more. Not only is this unsuitable for the majority of us, we as retail investors already have a way to access these investments through our deeply envied investment trust industry.
If we're struggling to convince people to buy stock in our FTSE 100 companies – because they believe they're too complex or too risky – I doubt these savers will have the wherewithal to conduct due diligence on an asset that most fund managers aren't legally allowed to invest in.
The Financial Conduct Authority has simultaneously produced a set of reforms that will make it easier for us to buy individual corporate bonds, a product no first-time investor should be considering to build their portfolio with.
And Reeves sang the praises of the private intermittent securities and capital exchange system (Pisces), which would allow shareholders in private businesses to occasionally flog their shares to the rest of us. These are even riskier and more difficult to sell than anything you could find on Aim – in fact, currently, they're impossible to sell.
While the safety railings are being dismantled, the Government is also watering down the protections we're afforded as consumers. The Financial Ombudsman Service will pay out less than it used to, and be neutered of its powers at the behest of businesses – a fact the Government acknowledges in its statement.
Risk warnings will be tempered to be less off-putting, and less than two years after the Consumer Duty came into force – legally requiring businesses to consider the customer more than before – the regime faces reform.
The simplest solution to breaking down barriers and encouraging the non-investor to dip their toe is education, yet even on this point, the Government isn't on our side.
Rather than announcing a new programme of financial education in schools and building a generation of investors, the reforms focus on shifting the curriculum to 'align approaches on shared skills priorities in the financial services sector'.
Once again, the Government has proven it is deeply vulnerable to lobbying. The building societies complained loudly enough to ensure the cash Isa reforms were shelved, and the investment industry has lobbied hard enough to sell its private markets to us.
In her Mansion House address, Reeves said: 'For too long, we have presented investment in too negative a light, quick to warn people of the risks, without giving proper weight to the benefits.'
We are on the edge of forgetting those risk warnings are there for a reason.
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BBC News
22 minutes ago
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But the finance industry appears to have avoided the potential free-for-all rush to claim compensation the earlier verdict had threatened to spark while the Treasury says it will "work with regulators and industry to understand the impact for both firms and consumers", the BBC understands that the likelihood of the government intervening with retrospective legislation to protect financial firms has now diminished law of bribery only applies to persons who owe a single-minded duty of loyalty and are therefore bound to have no personal interest in the matter that they are dealing the present case the car dealers plainly and properly have a personal interest in the dealings between the customers and the finance companies.
The Sun
22 minutes ago
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Who asked for population of Greater Manchester to flood UK in just 4 years? Politicians are so out of touch with public
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Because what they understood is what far too many of our politicians in Westminster today fail to understand — that once this sacred bond between the rulers and the ruled breaks, there is no going back. Once leaders become so out of touch, so adrift from the people they claim to represent, then their civilisation will plunge into chaos, carnage and darkness. And is this not what is happening in Britain today? A political class, a ruling class, that increasingly looks utterly adrift from the hard-working, tax-paying, law-abiding majority? Take another issue some of those ancient philosophers alluded to: The influx of outsiders and foreigners through the deliberate policy of mass uncontrolled immigration. Who voted for this? Only this week, shockingly, we learned that the population of England and Wales is growing at the fastest rate in history, with some 707,000 people added last year and some 2.5million since the outbreak of the Covid pandemic. Who voted for this? Seriously? Who voted for this population explosion, for a pace and scale of change that is now leaving many of our communities and our country unrecognisable? Who asked for their leaders to add the equivalent of the entire Greater Manchester area in only four years? And just look at how dramatic and historically unprecedented this is. Between the election of Margaret Thatcher, in 1979, and Tony Blair, in 1997, the annual rate of population increase in England and Wales never surpassed a peak of 188,000 people in a single year, and averaged roughly 111,000 people over each 12-month period. 11 But since Covid? Well, thanks to policies introduced by the hapless 'Uniparty', by politicians on both the Left and Right who are now openly ignoring what the people want, if not treating them with total contempt, these numbers have rocketed. Some 618,000 people were added to our population in the year to June 2022. Another 821,000 in the following 12 months. And now, in the year to June 2024, as we learned this week, another 707,000. What is the main reason for this? Well, it's definitely not what's called 'natural growth' among the native English and Welsh people — the kind of growth that ensures a country grows and evolves at a natural pace, where change is manageable. No. Far from it. Almost all of our population growth today is because of mass immigration, with 1.1million people migrating into England and Wales in the 12 months to June 2024, and 452,200 leaving. Think about that. Around 1.1million people in just one year — equivalent to adding a city the size of Liverpool, comprised entirely of migrants, in just 12 months. This is insane. Claims are nonsense And on top of that we can add another fact we discovered this week, which is that the number of small boat crossings this year alone has now surged above 25,000, up 51 per cent on the same point last year, and taking the total to more than 170,000 illegal migrants since 2018. 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Daily Mail
22 minutes ago
- Daily Mail
Donald Trump hits out at Federal Reserve as US jobs fall
Donald Trump launched a fresh attack on the chair of the Federal Reserve after the US jobs market suffered a sharp slowdown over the summer. The world's largest economy added just 73,000 jobs in July – fewer than the 110,000 expected – reviving hopes of a September interest rate cut. And figures for May and June were lowered by 258,000 in an unusually large revision by the US Bureau of Labor Statistics (BLS). In retaliation, Trump last night said he would sack BLS head Erika McEntarfer. It came as US stocks tumbled after Trump slapped tariffs on trading partners. The Dow Jones Industrial Average fell 1 per cent yesterday afternoon, while the S&P 500 dropped 1.2 per cent. The tech-focused Nasdaq was down 1.7 per cent. European stocks were also rocked by Trump's trade war, with Germany's Dax losing 2.7 per cent and Paris's Cac index dropping 2.9 per cent. The UK got off lightly as the FTSE 100 fell 0.7 per cent, or 64.23 points, to 9068.58. Pharmaceutical firms were among the biggest fallers in London after Trump demanded lower prices. AstraZeneca fell 1.9 per cent and GSK dropped 1.5 per cent. The retreat came as revised figures showed the US economy added just 14,000 jobs in June, a figure revised from a previously reported 147,000. Payrolls for May were slashed by 125,000 to a gain of 19,000 jobs. The BLS described revisions as 'larger than normal'. Atakan Bakiskan, US economist at Berenberg, said: 'The July report provided ammunition for those expecting a Fed rate cut in September.' 'This data has led to a rapid recalibration of US interest rate expectations,' Kathleen Brooks, research director at XTB, said. On his social media platform Truth Social, Trump wrote: 'Too little, too late. Jerome 'Too Late' Powell is a disaster. DROP THE RATE! .. Tariffs are bringing billions of dollars into the USA!' The President has branded the central bank chair a 'stubborn moron', saying he 'must lower interest rates now'. 'If he continues to refuse, the board should assume control and do what everyone knows has to be done,' he added. Reports last month suggested Powell's future could be in doubt after Trump met congressional Republicans to discuss sacking him. But the President later insisted he would only fire the central bank boss if he were guilty of fraud.
