Our CEO, James Ashton, placed a vital spotlight on the challenges and opportunities facing small and mid-cap quoted companies – the UK’s essential growth companies – during a session with the Business and Trade Select Committee. Chaired by the Rt Hon Liam Byrne MP, this important inquiry is focused on “financing the real economy” and, crucially, addressing the persistent “valley of death:” the funding gap between early seed finance and the significant growth capital needed for expansion.
The QCA membership shares concerns that this gap is leading to the “shortening of the long tail” of promising smaller companies, which is one of the UK’s most unique economic strengths. Given that companies with a market value of less than £100 million make up two-thirds of the AIM market, it’s critical to get capital flowing to this sector.
We pressed the committee on several key actions that would unleash our members’ potential to continue scaling and investing in the UK economy:
- Securing certainty over Business Property Relief and rethinking VCT limits.
- Closely linking ISA benefits to investment in UK stocks.
- Steering the British Business Bank into making public market investments.
- Revamping the UK audit regime to encourage greater auditor choice for small and mid-caps.
- Subsidising equity research so that the compelling stories of smaller stocks are better understood by institutional investors.
We also highlighted that post-Woodford guidance from the Financial Conduct Authority has unfortunately shrunk institutional interest in our stocks, compounding the issues of rising costs and depressed investor appetite.
Alongside testimony from QCA member Blackbird plc and AIM success story GBG Plc, our message was strong and clear. Backing Britain’s innovators is the surest route to rebuilding the country’s wealth, and the QCA is committed to leading the campaign to fix the scale-up finance crisis.
