This news shows why the government's industrial strategy, National Wealth Fund and GB Energy are needed to foster investment projects Firms have an almost record amount of spare cash to spend on boosting share prices whilst investments plumb new lows www.ft.com/content/3056... - ThreadSky

georgedibb.bsky.social • 46 days ago

This news shows why the government's industrial strategy, National Wealth Fund and GB Energy are needed to foster investment projects

Firms have an almost record amount of spare cash to spend on boosting share prices whilst investments plumb new lows

https://www.ft.com/content/30560ebb-da28-4038-8f1d-f6fc6c0b30f5?shareType=nongift

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georgedibb.bsky.social•46 days ago

High share buybacks (almost at 2022 record) are symptom of an economy where firms can't identify investment opportunities - a worrying sign given investment is the fuel that our growth engine runs on

Industrial Strategy can help give a steer of future growth areas and shift this

georgedibb.bsky.social•46 days ago

The gov wants to "invest, invest, invest" and it recognises that public investment crowds in private, but it may struggle to carve out the fiscal space for a full-fat industrial strategy or sufficiently capitalised National Wealth Fund

georgedibb.bsky.social•46 days ago

So on the one hand we have a government with not *enough* money to fund all the investment projects it wants to support

And on the other hand we have companies who can't find *anything* worth investing in

Theres an easy way to resolve this and its with a low levy on buybacks

georgedibb.bsky.social•46 days ago

All share transactions are already subject to a 0.5% levy in the UK

A back-of-the-envelope calculation shows that adopting a 4% buyback levy as proposed by Biden (and half the 8% 🇫🇷 proposal) would've raised an addition £2bn in 2024 to fund government investments

georgedibb.bsky.social•46 days ago

To put that in context, the National Wealth Fund will be capitalised with £5.8bn over this parliament to invest in private sector green growth projects

If UK buybacks remain at their current levels for the full parliament, a levy could support an extra £9bn (⬆️170%) for the NWF

georgedibb.bsky.social•46 days ago

The 🇺🇸 introduced a buyback tax in the Inflation Reduction Act and they've been proposed by governments in 🇨🇦 and 🇫🇷

We set out how this could be implemented in the 🇬🇧 here:
https://www.ippr.org/articles/buy-back-better-the-case-for-raising-taxes-on-dividends-and-buybacks

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