Plenty has happened in the last ten years. Much of it unexpected.
Who, for example, would have thought in the run up to the largest global financial crisis since the Great Depression that, within a decade, Britain would have voted to leave the European Union, or that Donald Trump would be elected President of the United States of America?
But the crash, often symbolised by the collapse of Lehman Brothers in the US and the bank run on Northern Rock here in the UK, has not necessarily changed everything.
Few economists foresaw the paralysis that gripped much of our banking system, as governments raced against time to rescue our failing banks and encourage them to start lending to businesses again – especially small and medium-sized ones.
Yet, herein lies the main structural problem facing the UK: our companies have never quite been able to shrug off their appetite for borrowing money.
Indeed, recent research published by Link Asset Services has indicated that UK listed company debt amounts to an eye-watering £390.7 billion – around a quarter of UK GDP.
On the one hand, who can blame them? Interest rates have been kept at record lows by central banks across the world over the last ten years. There is a perfectly rational argument which suggests that there has never been a better chance to access cheap loans.
At the same, research conducted by the Quoted Companies Alliance earlier this year showed that the costs of obtaining external investment through public capital markets remains punitively high. To have the privilege of floating on the UK’s Alternative Investment Market (AIM) – the world’s premier market for smaller, growing enterprises – companies can be forced to fork up to £1m in legal, broking and accountants fees.
Maintaining the quotation can also top an eye-watering £400,000 each year.
But evidence from global bodies such as the OECD and the International Monetary Fund have been crystal clear: a higher dependence on debt by companies results in higher levels of stock market volatility, unstable financial systems and, subsequently, slower economic growth.
This means that if the British economy experiences a period of volatility in the coming years, there could be an alarming number of companies facing financial pressures at best, or insolvency at worse, putting the livelihoods of many at risk.
With this in mind, in our latest proposals for taxation reform, which we submitted to the Chancellor last month, the Quoted Companies Alliance made clear that reliance on debt finance was not a long-term solution for small and mid-size quoted companies.
We therefore proposed giving companies looking to raise money on public equity markets tax relief on all associated costs up to a maximum of £1.5m. This relief could be applied to both initial public offerings (IPOs) and secondary fundraisings.
This idea is not new. In fact, 18 European countries – 13 of whom are members of the European Union – already provide tax relief for the costs of raising equity. This has given smaller companies in those countries a larger incentive to consider using public equity markets to finance their growth and development.
We believe these impacts would be replicated in the UK, which has a far deeper pool of potential investors, creating a significant increase in capital market activity. Any cost to the Exchequer would be counter-balanced by encouraging smaller companies to scale-up, creating the jobs and wealth Britain needs in this period of economic uncertainty.
While, with Brexit on the horizon, there may be little wiggle room for the Chancellor when he gives his Budget on 29 October, he would do well to be bold in taking the opportunity to unleash the full potential of a mutually beneficial partnership between smaller companies and capital markets.
I look forward to hearing if he decides to take it.
Tim Ward is the Chief Executive of the Quoted Companies Alliance.