Just
Just days after Chris Sutton’s
appointment as the new chairman of the Finance & Leasing
Association, and less than two weeks after the UK’s general
election, a posse of senior FLA officials paid a visit on the Bank
of England.
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Their message to BoE officials,
according to people who attended the meetings, was simple enough:
that the motor – and asset – finance industries face continuing
problems with liquidity and providers dropping out of the
marketplace, and that something needs to be done to reverse
this.
Much hard lobbying needs to be done to
force the government to pay attention to the industry’s needs. Much
has already been achieved. For months before the election, sources
say, Stephen Sklaroff & Co lobbied the Tories with the
expectation that they would form the next government.
The FLA also has a fairly good record
of guiding the government on key policies. For instance, Sutton
said last month that it had been instrumental in guiding new
Labour’s policies on VAT.
But there is still much more work to
do. Sutton told me last month that one of the FLA’s current
priorities is getting “the government to acknowledge the benefit of
the leasing market”.
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By GlobalDataIf successful, he remarks, not only
will it bolster lessors, it will also aid economic recovery.
Forward thinking indeed, but in reality the FLA has been trying to
do this for years.
Furthermore, while Sutton says he
expects “a Tory-led government to be more in tune with the needs of
business”, the new chancellor, George Osborne, while in opposition,
announced plans to decrease capital allowances even further.
Other
challenges lie ahead. The final details of the Consumer Credit
Directive have still not yet been finalised. Furthermore, as much
as the FLA might want to influence policy, governments always err
in favour of what will get them the most votes, and supporting an
industry connected to PPI insurance is hardly going to win it many
new friends.
Notwithstanding this, there are still
some populist decisions this government is taking which are not
only winning support from the general populace, but also from
lessors.
Such a decision was revealed recently
by James Stewart, the new chief executive of Infrastructure UK, in
an interview with a trade title. In it he said that electric cars,
as well as water infrastructure, climate change and ‘digital
Britain’, lay at the forefront of his strategic thinking.
This suggests that the government will
be open to new ideas from the likes of the FLA around encouraging
cleaner vehicles.
This is a sensitive subject for motor
financiers which remain largely unwilling to invest in assets whose
values in five years time are largely undeterminable.
But there are still lenders brave
enough to dip into these largely unchartered waters: last month
Nissan and Smith Electric Vehicles, with support from their finance
arms, lodged bids to source low carbon assets to Transport for
London.
While Bank of England meetings are no
doubt good for raising the profile of the FLA, the real battles
will be fought over the more popularist green related issues.
Brendan
Malkin
brendan.malkin@vrlfinancialnews.com
