GK insights

GK insights is a weekly update from GK consultants, looking at the latest political, policy and regulatory developments that investors and businesses need to be aware of, as well as into Government funding, initiatives, proposals and consultations aimed at boosting innovation in the business world.

Get in touch at: info@gkstrategy.com.

Government sets out new plan to protect leaseholders from cladding costs

The Government has launched a new building safety plan to protect leaseholders and place responsibility on developers and companies to cover cladding costs. The formerly proposed loan scheme for leaseholders in medium-rise flats will now be scrapped, with industry given two months to agree to a financial contributions scheme to fund the new plan, otherwise, if necessary, the government will impose a solution in law.

Michael Gove, Secretary of State for Levelling Up, unveiled a 4-point plan to reset the government’s approach. Firstly, the Government will move to the next phase of the Building Safety Fund to facilitate the removal of dangerous cladding from high-rise buildings, the highest risk buildings will be prioritised. Secondly, a new team is planned to pursue and expose companies responsible for faulty cladding. Thirdly, indemnifying building assessors from being sued; and withdrawing older government advice that resulting in many buildings being declared as unsafe. Fourthly, the Government hopes to enact new protections for leaseholders living in their own flats within the Building Safety Bill.

New funding for innovative carbon capture programme

The Government has launched a new programme to help develop innovative technologies to produce hydrogen, a clean energy source, from sustainable biomass and waste. The new Hydrogen BECCS Innovation Programme will support the development of technologies to produce hydrogen generated via BECCS (bioenergy with carbon capture and storage). The BECCS process produces hydrogen from biomass and waste, with the ability to capture and store the carbon released during the process. The Government hopes that hydrogen BECCS technologies will play an important in helping the UK reach net zero emissions. It may be a process to keep an eye on as the Government attempts to position hydrogen as a clean fuel for sectors such as transport industry.

FCA to launch market studies into the quality of wholesale data

The FCA will launch two market studies and gather further information to investigate access to wholesale data. In response to a call for input, the FCA heard concerns that limited competition in the markets for benchmarks and indices, credit ratings and trading data may increase costs for investors and affect investment choices. In a market study to begin this summer, the FCA will look into concerns that complex contracts for benchmarks and indices prevent switching to cheaper, better quality or more innovative alternative providers. Benchmarks and indices are used by market participants like asset managers, banks and clearing houses to track and evaluate asset prices and investment performance.

By the end of the year, the FCA will launch a second market study to assess whether high charges for access to credit ratings data is adding costs to investors and limiting new market entrants. Access to high-quality credit ratings helps investment managers assess financial risk, influencing which investments they make. The FCA will also now begin gathering further information on competition in the market for wholesale trading data. Trading data include information on how many financial instruments are being traded, what people are prepared to pay for them and the price at which trades are executed. These data are supplied by venues – like stock exchanges – where these financial instruments are bought and sold. Concerns have been raised that limited competition may increase costs and have an impact on the types of assets that investment managers buy and sell.

Access to wholesale data allows market participants who manage investments to identify and evaluate investment opportunities. A lack of competition could affect the quality of wholesale data and mean increased costs for investors, including, ultimately, pension savers.

This week’s blogs

National security and foreign investment in the UK economy

GK’s defence and security expert, Scott Dodsworth shares his thoughts on national security and foreign investment into the UK.