It is excellent news that a new government has been formed and this positive step should help reassure businesses that a credible and effective steer on economic policy will be forthcoming, rather than facing the nightmare alternative of a continued hung parliament and further elections.
The ABFA welcomes both David Cameron as Prime Minister and Nick Clegg as Deputy Prime Minister and we look forward to seeing what detailed policy initiatives are forthcoming to help support UK firms. In particular we agree with their latest moves giving capital gains tax exemptions for entrepreneurial business activities which can only help boost SMEs, plus support the major loan guarantee scheme in its goal of improving access to finance for UK firms.
However, the ABFA has concerns regarding today's statement from the new government
on implementing net lending targets for the nationalised banks and sees this
move as potentially damaging for both UK companies and banks alike. That said
we consider the move towards giving the Bank of England charge of macro-prudential
regulation, whilst overseeing the FSA's role as the micro-prudential regulator,
as highly sensible and workable.