Rules which continue to be imposed upon London from Brussels despite Brexit are depriving Britain of a dizzying £7 billion a year which could be spent on the NHS and vital infrastructure, UK-based financiers have warned.
More than 130 financiers, including Sir Douglas Flint, chairman of investment firm Abrdn, voiced their concerns in a letter to Chancellor Jeremy Hunt.
In it, they highlighted EU-era regulations which are still applied to British investment trusts.
In total there are 361 such trusts on the stock market, controlling assets totalling £267 billion.
Mr Flint and his fellow CEOs believe all are being jeopardised as a result of rules which make it seem as if the costs of investing are a great deal more than they actually are.
Mr Flint told The Mail on Sunday the red tape represented “a barrier to getting money for the infrastructure we desperately need”.
He continued: ‘We need to make it attractive to invest in the UK and for people to fund infrastructure through their retirement plans.”
Justin Dowley, who is the chairman of the FTSE 100-listed Scottish Mortgage Investment Trust and also a signatory, was unhappy that, despite the UK quitting the bloc, City watchdog the Financial Conduct Authority (FCA) was continuing to apply them.
The situation had result in a sell-off of trusts, leaving them short of funds and vulnerable to foreign takeovers, Mr Dowley warned.
The current regulations risking depriving areas such as renewable energy, science and biotechnology of desperately needed cash, he added.
The letter explained: “This is having adverse effects on investment in the UK and is driving British investors’ capital into companies listed overseas, contributing to the poor performance of the UK stock market.
“This surely cannot be allowed to continue. The UK’s interpretation is flawed.
“Fixing the problem by doing the same as the rest of the world could restore over £7 billion per year of lost investment – with no cost to the taxpayer.”
It added: “We call on the Government and the Financial Conduct Authority to take action now to end this situation immediately and return the UK to a competitive position.”
The campaign has been backed by AJ Bell, one of the UK’s largest investment platforms.
A Treasury spokesman said: “We recognise industry’s concerns and are working at pace with the FCA to reform the UK’s retail disclosure regime, including for investment trusts.
“We’ll set out further details on these reforms soon.”
