Tuesday, May 28, 2024 9:13 AM
Labor intends to push through government plans to introduce a UK ISA if elected to power to boost efforts to get money flowing into the stock market, AM city can reveal
The Labor spokesman’s comments mark the party’s first public stance on one of the government’s flagship city reform policies after days of doubt over whether Rachel Reeves and Keir Starmer would push through the scheme.
Plans for a UK ISA were announced by chancellor Jeremy Hunt in his March Budget this year to attract more investors to the stock market with a £5,000 tax-free rebate for investing in UK listed companies.
According to the timetable set out by Hunt, consultation on the plans will close on June 6, but no firm date has been set for the products to be launched.
Those plans were called into question by Rishi Sunak’s move to call early elections in July and left the finance ministry “in a bind”, the source said. City AM. last week. However, Labor has indicated it will now support the ISA plans if elected to power.
“Labour has no plans to drop the UK ISA,” the spokesman said City AM “Labour wants to make it as easy as possible for people to experience the benefits of saving and investing their money, including through increased use of stocks and shares ISAs.”
Since their announcement in March, the City’s UK ISA plans have proved divisive over the fact that a relatively small number of investors will actually qualify for the tax break. Several leading retail investment platforms criticized the measure as a “charade” and “tokenist”.
Labour’s backing represents her firmest stance yet on the UK’s ISA plans after pledging to “simplify the ISA environment” last year. The move may also restore some certainty to the Treasury’s post-election planning, thrown into disarray by Sunak’s gamble to hold elections in July rather than the fall.
Ministers have been trying to overhaul regulations and rules around the city amid concerns about its attractiveness as a financial centre, but a number of plans remain in development.
Under shadow chancellor Rachel Reeves, Labor is vying for the affections of business and broadly backs the government’s City reform agenda, including efforts to release more capital into markets. However, it is unclear where her priorities will lie and what specific measures she will take if elected, effectively causing the Treasury to suspend and postpone some of its work.
Among the areas the election is calling into question are plans to transfer some of the government’s remaining stake in Natwest to retail investors, which the government has drawn up in a bid to boost the UK’s investment culture.
In his Budget in March, Jeremy Hunt described the sale as a “tell Sid” moment for UK investment, a reference to Thatcher’s move to privatize British Gas and sell shares to the public.
The plans were already on shaky ground after the Treasury reversed the intended structure of the deal and suspended the bidding process with retail investment platforms to handle the sale, City AM. previously revealed.
After Sunak called the election on Wednesday, the finance ministry confirmed last week that the sale would not take place during the election period. Labor has now said it has yet to make a firm decision on whether to push through the plans if elected.
“Labour will consider the details if we form the next government after the general election,” a Labor spokesman said City AM “All the decisions we make will be about ensuring value for money for taxpayers and investors.”
Natwest itself is buying its shares back from the government and it now looks likely that the Treasury and UKGI, the body that manages the investment on behalf of the government, will sell the shares by other methods.