Labour will boost scale-ups after Jim O’Neill review promises Shadow Minister

Jonathan Reynolds MP

Labour will ease pension rules to allow defined benefit schemes to invest in fast growing businesses if they take power.

Jonathan Reynolds, the Stalybridge and Hyde MP and Shadow Business Secretary, said in a speech to The City UK that green investment and a shake up of finance rules would form the planks of an industrial strategy.   

Reynolds said: “At the end of last year, we were delighted to receive the report of Labour’s start-up review, headed by Lord Jim O’Neill, a man who, like so many good things in this country, was made in Manchester.”

“I have heard time and again from business about the stubborn obstacles preventing them from scaling up, about issues with access to finance, especially patient capital.

“Take our pension funds. Defined benefit funds in Britain have almost £3 trillion in assets under management. But right now, it is more often Canadian pension savers who benefit from start-ups here in Britain than savers at home.”

Reynolds said the model he was looking to adopt was France’s Tibi scheme which has secured more than 18 billion Euros of government investment by bringing institutional investors together with venture capital.

Labour’s Green Prosperity Plan was the centrepiece of Labour’s economic policy, he said, pointing to the need for 10 battery giga-factories by 2040 to keep up with demand as the country is just 7 years off the ban on new petrol and diesel engine vehicles being sold.

Reynolds, who trained as a corporate lawyer with Addleshaw Goddard in Manchester before entering politics, has been part of a so-called ‘smoked salmon’ offensive by Labour of attending breakfast meetings with business leaders over the last year.

However, in the speech at London’s Guild Hall, he refused to commit Labour to a reversal of Brexit, even in front of an audience of City financiers sympathetic to the idea.

We get a lot of free advice in the Labour Party, by people saying to us some version of : ‘you are 20 points ahead in the polls, you lead on the economy, on immigration, so surely now’s the time to plunge straight back into the Brexit debate that paralysed British politics for the best part of 5 years’. I’m not convinced.

“In our view, one of the central problems that we must overcome, is the fact that the UK has the lowest rate of business investment in the G7, the kind of uncertainty that would be created by restarting the Brexit debate, would not be sensible.

“But Europe is and will remain an essential market for our financial and professional services. So the next Labour government will prioritise a closer trading relationship with our neighbours,” Reynolds added.


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