The chancellor is set to offer a £50bn cash boost to high-growth startups as part of a deal with some of the UK’s biggest pension funds and insurers.
Chancellor Jeremy Hunt is expected to unveil the reforms this evening during a speech at Mansion House. The startup funding pool represents a 5% slice of the investments of the participating pension funds, which would unlock £50bn by 2030 and is geared toward spurring growth in early-stage startups.
Hunt is also expected to include other reforms as part of a plan to seize the “benefits of Brexit” and recover from the economic slump the UK has faced this year.
Hunt is expected to announce plans to digitise share certificates for public companies, with the goal of making the management of share registers cheaper and simpler in an effort to encourage firms to list in London.
The chancellor will also unveil a plan to simplify the documentation process required of listed firms when raising money from investors.
Andrew Megson, CEO of My Pension Expert, said the chancellor’s plan to utilise pension funds to support high-growth UK startups is “understandable”.
However, he noted that “Hunt is also right to point out that the primary focus must be the outcomes for pension savers – after all, it is their hard-earned money that is being discussed here, and people’s retirements hinge upon the security and performance of their pensions”.
Khalid Talukder, co-founder of FX consultancy firm DKK Partners, said: “Our economy is built on the success and hard work of start-ups and SMEs going the extra mile, so these changes will help unleash Britain’s potential by unlocking extra investment that is so badly needed.
“But much more needs to be done to enable these companies to expand and trade internationally, they need better access to the latest tech and payments services.”
The government and regulators are also weighing up proposals to encourage more London public listings. However, proposals to loosen listing requirements did not go down well with 10 major pension schemes, who last month warned that the reforms would undermine investor protections.