Wednesday, July 10, 2024
Here are perspectives from three figures in the fintech industry on what the new Labour government means for business.
Tom Eyre, co-CEO and co-founder of Loqbox, stated, “Financial education is essential, but it’s often neglected. There have been sporadic attempts by the previous government to embed some form of financial education into the school system. The reality is most 16 or 18-year-olds leave school not knowing what APR means, or the difference between a loan and a credit card, and crucially they often don’t understand that both have to be repaid.
#The new Labour government has a duty to make financial education a priority. Every citizen of the UK directly and indirectly contributes to the economy and vital public services through spending, saving, and paying taxes. It’s time the government paid it back by contributing to building the financial health of every citizen.
#This effort is especially pertinent in today’s climate, with inflation set to be with us for some time to come and households wanting more active measures to counter the rising cost of living. Given that we are experiencing unprecedented high inflation and energy costs, stagnant wage growth, and precarious economic circumstances, it’s imperative that the new Labour government makes the cost-of-living crisis a priority and delivers meaningful action.
#In fact, our recent survey of the UK public showed that the top issues that voters care about in this election were healthcare (54% of respondents) and inflation and interest rates (50%). But with only 6% of respondents rating their hopefulness on a scale of 1-10 as a 10 regarding how they felt about the election, a considerable number of voters need to see positive change from the new Labour government.”
“Small and medium-sized enterprises (SMEs) are the heart of the UK economy, contributing significantly to employment, innovation, and economic growth," said Sinead McHale, CEO of Satago. "In the current climate, the newly elected Labour government must prioritise and address their needs and concerns.
#Despite recent signs of easing inflation, business costs remain high. SMEs continue to grapple with profitability challenges and longer-term growth plans, with limited access to finance and late payments persisting from larger corporations.
#New policies must be implemented to support SMEs further, such as stricter penalties for late payments from larger businesses and incentivising prompt payment practices. Meanwhile, increased collaboration between fintechs and banks will help SMEs adopt more sustainable cashflow management practices. For example, invoice financing helps SMEs build resilience against future challenges and increases visibility by allowing them to access capital via their balance sheets.
#By prioritising fintech development, the new government can set the standard for fostering an overall prospective and resilient business environment, ultimately benefiting SMEs and the entire UK.”
Ryta Zasiekina, founder of CONCRYT, stated, “Reports that the new Chancellor Rachel Reeves is committed to ‘embracing’ fintech will be welcomed by the sector, which has long recognised its potential to drive growth in the UK. We now need to see these words translate into action from the new government.
"Earlier this year, Ms. Reeves’ predecessor asserted that the UK was on track to become the world's next Silicon Valley, and vowed to attract more investment.
"As the new Chancellor, she needs to acknowledge what he failed to: that despite the availability of early-stage funding, scaling up remains a challenge for tech start-ups in Britain. Too often this forces them to seek investment from the US and even relocate their businesses, taking valuable tax revenues with them.
"The policy plan for the sector by Innovate Finance clearly sets out how fintech firms can deliver £328bn in tax revenues to the Treasury by 2029.
"The new Labour Government needs to not only acknowledge the vibrancy of the fintech industry in the UK, but the need for more comprehensive support and resources to foster growth and innovation within the UK's own investment ecosystem, ensuring that promising ventures can thrive and contribute to the country's economic prosperity.
"The fintech industry is of strategic importance to the UK, and the Labour Party has specifically stated that ‘financial services are one of Britain’s greatest success stories’. Now, the Government needs to deliver on its promise to create the conditions to support innovation and growth in the sector, support new technology, and ensure a pro-innovation regulatory framework.”
These perspectives highlight the critical areas the new Labour government must address to support the fintech industry and broader economic landscape. From financial education and SME support to fostering innovation in fintech, the new administration has a clear mandate to drive positive change and ensure sustainable growth. As the political landscape evolves, the actions taken by the government will be closely watched by industry leaders and stakeholders alike. 
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