Responding to Chancellor Jeremy Hunt’s Mansion House reforms to boost pensions and increase investments in British businesses, FSB National Chair Martin McTague said: "The Chancellor's proposed Mansion House reforms hold potential to enhance the financial landscape for savers by removing some regulatory barriers, enabling consolidation and broadening investment choices. So many of us put a huge amount of trust in the pensions industry – it’s crucial they demonstrate that trust is deserved.
“High-growth business financing is critical, but for the Chancellor's reforms to have impact across the economy, the next stage should go further. The mission doesn't simply end at increasing pension pots, there is now the chance to catalyse real change to increase working capital across the economy.
“Chiefly, that means ensuring pension funds invest in high-performing firms that pay their suppliers on time, and less in companies who do not. Late payments are an unwelcome shadow over small businesses, inhibiting growth and innovation and destabilising supply chains. Pension funds have the leverage to shine a light on this issue and power the economy better - through their investment choices.
"The power of pension funds must come with responsibility – especially making sure the companies they invest in on our behalf aren’t artificially holding the economy back by paying small businesses late. This isn’t just about making sure the S in in Environmental, Social and Governance (ESG) stands for something more substantial, it’s about growing the economy too. Poor UK payment practices are a critical drag on investment and mean we all have less cash in our pockets to save up for our futures.
“A thriving equitable business environment will, in turn, bolster economic growth and safeguard the investments made by pension funds. This positive ripple effect is too valuable to be ignored.”
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