Labour plans to set targets for funding female-led businesses through the state-owned British Business Bank and to launch a review of the financial exclusion of women, if it wins the next general election.
The initiatives, which will be announced on Monday by the shadow City minister Tulip Siddiq, form part of the party’s financial inclusion agenda, following a review by 10 City grandees earlier this year of Labour’s financial services strategy.
Siddiq will reveal plans for two new performance targets for the British Business Bank (BBB), the economic development bank best known for overseeing Covid funding schemes during the pandemic. That will include an “overall investment allocation target” towards businesses led by women, as well as those led by ethnic minority founders. The BBB will also be required to issue reports on the diversity of applicants it considered for funding.
The size of its funding targets have yet to be confirmed, but will be set in coordination with the BBB, Siddiq’s office said. However, a 2019 report by the BBB found that only 1% of venture capital investment in the UK went to companies founded by women.
The funding pledge will be made at an event celebrating women in the City at the Association of British Insurers (ABI) headquarters on Monday, in front of an audience including women from across the insurance industry.
There, Labour will also promise to launch a review of female financial exclusion, which will be led by a committee chaired by a Treasury minister and involve other government departments, to identify the barriers to women reaping the benefits their male peers receive.
The review, which will also involve regulators and City firms, will be aimed at tackling poor take-up of financial advice and the root causes of the “gender pensions gap”, referring to concerns that a woman in her 50s has on average a third of the retirement savings of a man.
“Labour’s plan for financial services will ensure the industry breaks down barriers to opportunity at every level, boosting representation of women in senior roles and tackling the disproportionate levels of financial exclusion facing women in our society,” Siddiq said ahead of the event.
“This includes confronting the causes of lower female financial literacy, the ‘financial advice gap’ and the shocking ‘gender pensions gap’ which leaves women facing significantly higher financial uncertainty than men when they reach retirement.
“That is why a Labour government’s new national financial inclusion strategy will include a review of female financial exclusion, working on a cross-departmental basis to identify and remove the constraints holding women back from better financial decision-making.”
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The BBB said it was “unable to comment on Labour party policy”.
Separately, the Sunday Times reported that Labour has appointed several high-profile business leaders to a taskforce designed to advise it on creating a national wealth fund. They include the former Bank of England governor Mark Carney, Aviva’s chief executive, Amanda Blanc, and CS Venkatakrishnan, the boss of Barclays.
