on the rebuildingsociety.com blog

21st Apr, 2015

Never Again will we Capitulate in the Face of a Banking Crisis

It’s been a busy week for the political parties as they publish manifestos. While there are broad statements of intent, there is a concerning lack of detail around banking reform and mitigating the next banking crisis. With so much debate on austerity measures, political leaders are jockey to win points for their ideas on dealing with the symptoms, rather than tackling the cause. The banking system is far from fixed and there is sparse debate on the subject…

In the seven years before the financial crisis, lending to non-financial business accounted for just 8% of the total lending by UK banks. In fact, net lending to SMEs (that’s gross lending less repayments) was negative in the Bank of England’s most recent figures. Some of this is compensated with non-bank lending thanks to the rise of p2p lending and firms like rebuildingsociety.com

The banking system needs to do a better job of supporting businesses according to the manifestos of the three main parties published this week. Labour promise to “develop a banking system that works for businesses in every region and every sector in Britain”. The Conservatives “will continue to build a stronger, safer and more secure banking system that… provides businesses with the finance they need to grow and create jobs” and the Liberal Democrats pledge to “grow a competitive banking sector, support alternative finance providers and improve access to finance for business and consumers”.

But there’s a lot more to financial reform than supporting SMEs…

Do the political leaders really think that Basel III goes far enough?!

Do politicians really believe that the reforms of the last five years have fixed the financial system, and that this is something we no longer need to worry about? Experts continue to warn that the next crash could be just around the corner, and research from NEF shows that the UK remains uniquely exposed.

Meanwhile, mis-selling scandals continue to pop up with depressing regularity – even the Pensions Minister seems worried that the government’s latest pension reforms may build the next wave of mis-selling as unscrupulous dealers rush to take advantage of vulnerable pensioners. Have we reached the goal of a financial system that is stable, sustainable and fair?

The stakes could scarcely be higher. So why are our politicians so reluctant to talk about financial reform? Perhaps they are in the pockets of the industry…? Or maybe they just think that financial reform is not a voting issue – that ‘banker bashing’ has become unfashionable.

If the new government doesn’t seek to reform the financial system, then it’s even more important we work together to dis-intermediate finance. Bypassing the banks is one way you can play a small part in helping avert the next financial crisis.

Alas it seems we’ve got a long way to go on our mission; but while society needs work, we’ll keep rebuilding.

If you’re not a member and would like to help with the rebuild, please register here.

This article was inspired by posts from Positive Money and the New Economics Foundation. Please help spread awareness. There’s no excuse to be unprepared for the next crisis.

Photo Credit: CC: Rob Taylor

13th Apr, 2015

A breakthrough in the finance revolution

Seeds of opportunities for SMEs and investors have been sown: the House of Lords is leading the push for a European Capital Markets Union. Central to this will be the potential for better access to finance for SMEs, and more opportunities for investors.


06th Feb, 2015

PM Visits Leeds to Set Out His Long-Term Economic Plans for Yorkshire

With the election drawing ever closer, David Cameron and George Osborne visited Leeds yesterday to discuss their vision of a ‘northern powerhouse.’ Our own MD Daniel Rajkumar joined the Institute of Directors to hear his speech.

Addressing business leaders from the region, the Prime Minister and Chancellor spoke about their ambitions for Yorkshire and their plans to create 100,000 new jobs.They stressed the importance of closing the North and South divide and the need to sustain the region’s current growth. Mr Cameron spoke of achieving this through improving transport along with the backing of science, tech start-ups and creative industries in the area.


11th Dec, 2014

Summary of our NISA Consultation Response

rebuildingsociety responded to the recent Treasury consultation on peer-to-peer loans falling under ISA wrappers. We’ll keep you posted on the outcome of the consultation – ultimately we’re delighted that we’ve reached this stage so quickly and with the tax breaks for losses on p2p loans recently announced in the Autumn Statement, the case for investing in UK businesses is becoming even more compelling.

Here is a summary of our sentiment and response:

– We believe p2p platforms should have a secondary market to facilitate liquidity, although we don’t believe it is practical to enforce ‘guaranteed sale timescales’, as it is an open market. (more…)

03rd Dec, 2014

Autumn Statement: Business stands to win

There was a positive response from the business industry to the Chancellor’s Autumn Statement. Chiefly, the promise to look at the unpopular business rate system chimed with business owners and commentators, including the FSB.

“The FSB is delighted to see the double small business rate relief remain for another year and a full review of the outdated business rates system, something we’ve long argued for,” says its chairman John Allan.

National Insurance is set to be abolished for apprentices too. Mr Osborne said: “When a business is giving a young person a chance in life we’re going to support them not tax them.” In order to avoid the 50%+ youth unemployment rates in other countries across Europe, this feels like a sensible step. More could probably be done to align the education system to the future needs of the economy though, in industries like digital.


10th Sep, 2014

Interest rates might rise in 2015, but who should be concerned?

After five years of record lows, Mark Carney seems to be preparing the UK for a rise in the early part of 2015. It’s an encouraging sign of health in the UK economy, particularly after the Bank of England’s governor identified inflation and unemployment as the barometers for making the change.

This suggests life is getting a bit easier for the vast majority of people in the UK – and the governor has been careful to faze this in slowly – there are many who are concerned about the impact of a rate rise on family and business finances and the wider recovery.

For businesses, the time to read the small print in bank loan agreements is now. Repayments or fees linked to interest rate movements could destabilise a business, so refinancing away from a bank facility now could save a nasty surprise when rates do go up.


25th Jun, 2014

The Role of Politics in Alternative Finance

Whatever your opinion of the role of Government in free market economics, there is no questioning the importance of its stance and the value of a positive position to those operating in a market that has been touched by Government, like alternative finance.

Anything new in financial services poses challenges for Governments and questions like:

Is it a good thing? Should we regulate it? How can we get involved without compromising our neutral position?

The situation is arguably more complicated now given the sheer acceleration in disruption, driven by technology, which is leaving policy makers behind.

This week, at a seminar hosted by Interel, the Public Affairs consultancy, the attitudes of policy makers towards alternative finance were revealed in the launch of a paper called ‘Banking on Innovation: Uncovering the Political Barriers to Innovative Financial Services’.

What was clear in the report was a low level of understanding exists among MPs and trust is yet to be established from a survey of approx 25% of MPs: (more…)

19th Mar, 2014

A Budget for Businesses?

George Osborne’s latest budget has been largely welcomed by those in business. “A resilient economy is a more balanced economy with more exports, more building, more investment – and more manufacturing too”, said Mr Osborne.

We’ve outlined some of the key points for business owners:

Our reaction

We’re pleased that Vince Cable reiterated the need for the business finance market to become more competitive in his reaction. It would have been nice to see a reduction in National Insurance contributions, but the extension of grants for small businesses that take on apprentices is welcomed – we need to look after the next generation of workers.

It is great news for businesses looking to grow that the Annual Investment Allowance has been doubled to £500,000 and that peer-to-peer lending will be included in ISAs – this creates a new wave of would-be lenders into the industry.

Enterprise Zones

Hailing the success of the Enterprise Zones, Mr Osborne announced the extension of business rate discounts and enhanced capital allowances for a further three years.


06th Jan, 2014

What does 2014 hold for SME owners?

Business is invariably interwoven with politics and 2014 is set to be one of those years where politics has an enormous bearing on UK business. A few of the bigger issues and their potential impact on UK businesses are discussed here:

Big in the news at the moment is the lifting of the immigration cap on migrant workers from Romania and Bulgaria. Ed Milliband has suggested the UK is addicted to cheap labour, while rumours of a planned cap on migration by the Government (recently slammed by Vince Cable as unenforceable and illegal) reveal politicians’ eagerness not to let their election campaigns become dominated by immigration. Whatever your personal or political views, it will doubtless create opportunities for UK businesses to easily employ young and talented people from these countries.


05th Dec, 2013

The Autumn Statement – our reaction

rebuildingsociety.com’s response to the Autumn Statement with business owners and investors in mind:

For lenders / investors:

The Government’s announcement that it is looking to reform the criteria for stocks and shares ISAs to include peer-to-peer lending is a strong statement of intent even if it stopped short of making the full announcement, as predicted in the press earlier this week.

We feel the Government effectively announced what it could:

“The government is exploring whether to increase the number of retail bonds eligible for stock and share ISAs by reducing the requirement that such securities must have a remaining maturity above 5 years.”


Thank you
Your Bid's been