News In Brief 6 February 2017


Mike McCudden, director of the Scottish Social Stock Exchange, said the exchange is working with about ten prospective companies in Scotland planning to raise various amounts of capital, with the ambition to have the Edinburgh social stock exchange fully up and running by the end of the four-month research phase. The Social Stock Exchange is maintaining its target of 30 new members in the Edinburgh version its first year; it has identified about 1,500 companies across Scotland that fit its profile. The Social Stock Exchange was founded in 2013 and has 44 members with a collective valuation of more than £2 billion. The Edinburgh version will allow investors to identify companies or projects they want to support. Alasdair Rankin, finance and resources convener at Edinburgh council, said: “As a capital city and financial centre, we feel we are best placed to host and support a Social Stock Exchange. We know from our ongoing work in developing a 2050 Vision for Edinburgh that residents yearn for a more compassionate and equal city and are focused on narrowing the gap between rich and poor.”


Falling costs of electric vehicles and solar panels could halt worldwide growth in demand for oil and coal by 2020, according to a new report by the Grantham Institute at Imperial College London and the Carbon Tracker Initiative. Polluting fuels could lose 10% of market share to solar power and clean cars within a decade, the report found. The newspaper points out that a 10% loss of market share was enough to cause the collapse of the coal mining industry in the US, while Europe’s five major utilities lost €100 billion (£85 billion) between 2008 and 2013 because they did not prepare for an 8% increase in renewables, the report said. The cost of solar has fallen 85% in the past seven years. The report says solar panels could supply 23% of global power generation by 2040 and 29% by 2050, entirely phasing coal out and leaving natural gas with just a 1% share. By 2035, electric vehicles could make up 35% of the road transport market, and two-thirds by 2050, when it could displace 25 million barrels of oil per day. Under such a scenario, coal and oil demand could peak in 2020, while the growth in gas demand could be curtailed.


Nigel Wilson, CEO of Legal & General, was reported by the BBC as calling for “critical reassessment” of green belt land to help solve Britain’s housing shortage. He said that if 1% of green belt was released for building, it would be enough for up to one million new homes. A government white paper on revitalising England’s housing market, which has been delayed three times, could be published this week. It is expected to propose a relaxation of planning rules and that local authorities should be allowed to build more council houses for rent as well as purchase. “The green belt has doubled in size in the last 20 years, it is 4 million acres now. We’ve got to have a much greater critical assessment on what is and what isn’t green belt. Nobody wants to build on the Chilterns, or the Malvern’s or the beautiful parts of Britain, but there are lots of areas that have been designated green belt which are really brown field sites and we absolutely have to build on more brown field sites,” the BBC reported Wilson as saying.


Social investment tax relief (SITR) reforms that will increase the amount that some social enterprises can raise from the reliefs have been finalised, according to a policy paper released by HM Revenue & Customs last week. SITR allows investors who put money into regulated social organisations, including charities, to claim back part of their investment against their tax bills. In the Autumn Statement last year, the government said that social enterprises less than seven years old would be able to claim a lifetime total of £1.5m through SITR. Previously, all social enterprises were able to claim the equivalent of €340,000 (about £290,000) every three years through SITR, and the old limits on SITR will still apply to all qualifying social enterprises more than seven years old. The new policy paper also extends the list of excluded activities to include all energy generation activities, asset leasing, organisations providing banking, insurance, money lending or other financial services to social enterprises, and operating or managing nursing homes or residential care homes. The reforms will bring in approximately £10 million in 2017-18 and £5 million in both 2018-19 and 2019-20, before eventually costing the Treasury £5 million in 2021-22, the policy paper says. It also confirms that the new SITR rules will cost HMRC about £1.5 million in IT changes and administration. The changes will apply to investments made on or after 6 April.


The FT reports that Wales will begin searching for a company to oversee £13 billion of assets this week in the start of an overhaul of the UK’s local authority pension schemes. The country’s eight local authority pension schemes have pooled their cash to create a small number of supersized wealth funds that would invest in vital infrastructure across the UK. The Welsh pension schemes are now seeking an operator to oversee their investments, with the power to select which asset managers to invest with and which to cull. The 89 local authority schemes in England and Wales collectively oversee £214 billion for 5.4 million former and current council workers. A report published last week by the Centre for Policy Studies, a think-tank, said local government funds had collectively paid £9bn in charges over the past decade, half of that in hidden fees.




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