CHANCELLOR George Osborne must allow investors to pump cash from their tax-free savings accounts into Aim-quoted and Plus-listed companies in order to stimulate economic growth, according to a survey of smaller and medium-sized stocks.
Savers can currently use money from their stocks-and-shares individual savings accounts (Isas) to buy stakes in companies listed on the main market of the Stock Exchange.
Campaigners now want to scrap rules preventing investors from doing the same with Aim-quoted firms and those listed on the smaller Plus stock market.
A fifth of companies also want the Chancellor to use next month’s autumn statement to launch large infrasturcture projects to stimulate the economy, while a further fifth want a “National Insurance holiday”.
Tim Ward, chief executive of the Quoted Companies Alliance (QCA), which conducted the survey, said: “We need to re-fuel and kick-start our stalling economy – at the moment companies are stuck in a holding pattern.
“This sector is a crucial engine for growth and has identified the best incentives to achieve that. Now we need incisive policy decisions to turn them into a reality. We hope the Chancellor will be presenting just that in the autumn statement.”
Ward said the UK lagged behind other countries in terms of delivering incentives to stimulate growth in the small and mid-cap sector.
“If equity market regulation and other red tape do not reduce, we will start to see an exodus from our equity markets and headquarters moving to a more welcoming environment,” he added.
Neil McGill, head of corporate finance in Scotland at accountancy firm BDO, said equity market regulation topped the list of areas for reform, with suggestions it was thwarting com- panies’ growth aspirations and was therefore dysfunctional.
“Some commonsense easing of market regulations could incentivise growth, guard against loss of investment overseas and neutralise any perception that UK equity market regulation makes the country a closed shop for foreign investors,” McGill said.
The QCA’s demands came as CBI’s quarterly small businesses trends survey found that manufacturers reported a fall in both domestic and export orders in the three months to 31 October.
The CBI blamed the fall on the ongoing eurozone debt crisis and on the tough economic climate in the UK, despite the economy dragging itself out of the double-dip recession during the third quarter of the year.
A separate survey from BDO showed that like-for-like high street sales rose by 0.9 per cent year-on-year during October, showing what the firm called “signs of confidence” in the run‑up to the key Christmas trading period.
Figures released today by the Centre for Economic and Business Research (CEBR) suggest the UK will be the fastest-growing economy in Europe during 2013 and 2014 because of the continued eurozone debt crisis.
Meanwhile, an official at the G20 group of industrialised nations warned the eurozone crisis and the end of tax cuts in the United States will take their toll on the global economy.