Labour urged to look beyond London to revitalise UK investment landscape

High taxes and costs have contributed to diminishing economic activity, believes Max Thowless-Reeves, founder of wealth management firm Sorbus Partners, while claiming Brexit has been poorly managed.

A much less London-centric, regional approach to investments can help rescue the UK from troubled times as a new government takes the political helm, according to one of the country’s leading family office voices.

“There is no functioning venture capital outside of London,” says Max Thowless-Reeves, founder of wealth management firm Sorbus Partners, based in the northern English county of Staffordshire.

Mr Thowless-Reeves originally started managing family money, before extending the service to external clients, as most such operations end up doing. “Governments in the UK have tried dozens of micro-schemes and regional plans and Local Enterprise Partnerships,” he says. “None of them materially help and in aggregate drive venture investment away.”

It is his belief that the one tool that actually could make a difference – reducing tax on venture capital – appears to be beyond politicians’ worldview. “A political narrative, that casually dismisses wealth generators as simply expedient meat for tax rises and a tax system that punishes them,  will continually act as an economic deadweight, extending regional divides,” states Mr Thowless-Reeves.

Missed opportunity

While he is a strong long-term believer in the strength of UK PLC and in favour of Brexit, he says the poor execution of Brexit has driven away investment. Inadequate stewardship of the investment ecosystem by recent administrations have also proved counter-productive, he says.

“The UK is not uninvestible and indeed secures disproportionately in international inward investment,” he says, while claiming high taxes and high costs have contributed to diminishing economic activity.

“The Tory government did not have the will to tackle some of the more obvious structural problems,” says Mr Thowless-Reeves, who works with communities in the north of England to try to revitalise regional economies. “One in four working age people are on disability benefit,” and pension provision further skews struggling finances, with most public sector defined contribution schemes remaining open to new members. “These are not areas Labour has any appetite to address so their ability to tweak the dial in favour of growth is negligible,” he says.

Rather than viewing the UK’s decline through the lens of Brexit, he says regional economic performance variations are best understood via other factors, including energy costs and the changing dynamics of the manufacturing base.

Rule maker not taker

“The huge opportunity, that has not been grasped, is a recognition that the heft of London means it does not have to be a rule-taker,” he says, claiming that external rivals in financial services are still taking advantage of an EU-dominated legislative framework.

“The last government failed to recognise the structural and enduring power imbalance between the City and European competitors,” he says. “The threat to the City's dominance is not Frankfurt or Paris, it is New York and Singapore. It is time we reshaped our approach away from EU considerations to face this reality.”