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Hargreaves pines for Thatcher after savings 'fiasco'
Peter Hargreaves, co-founder of the Hargreaves Lansdown investment 'supermarket', urges the government to follow the policies of former Conservative leader Margaret Thatcher.
Peter Hargreaves, co-founder of Hargreaves Lansdown, the country’s biggest investment ‘supermarket’ has laid into the government over the ‘fiasco’ of its Funding for Lending scheme, which has boosted the mortgage market but punished savers.
A side effect of the government’s provision of cheap finance is that banks are less reliant on deposits to fund their mortgage lending and so they have been able to cut their savings rates and boost margins.
The subsequent fall in interest on Hargreaves Lansdown’s corporate cash account was the only blemish in a strong set of half-year results, which boasted a 30% leap in pre-tax profits to £93.7 million on revenues 24% higher at £140.3 million.
Shares in the Bristol-based firm (HRGV.L) jumped nearly 7% or 50p to 784p. They have soared 75% in the past year.
Hargreaves Lansdown continues to reap the benefit as people turn to its website to start investing and get a better return on their money. Twenty one thousand new customers joined its Vantage investment platform in the second half of the year, taking the total to 446,000. Total assets under administration advanced 30% last year to £30.4 billion. Shareholders, including Hargreaves, get a 24% rise in the interim dividend, up to 6.3p from 5.1p per share.
Business may never have been so good but Hargreaves (pictured) is furious about the coalition government’s record.
‘It’s the government that took over the regulation of the banks. It’s the government that’s at fault,’ he said in reference to the Funding for Lending scheme.
Hargreaves angrily dismissed the Bank of England’s quantitative easing policy of creating vast amounts of new money to buy UK government bonds in order to lower long-term interest rates as ‘government interference’.
‘The poor saver, who has been trying to make ends meet, gets hit,’ said Hargreaves, who urged the government to balance the books by slashing spending and follow the example of Margaret Thatcher in the 1980s.
‘When Thatcher so called “laid the economy to waste”, the UK rose from the ashes to become one of the strongest economies in the world,’ said Hargreaves.
Describing himself a natural Conservative, Hargreaves said he would not vote for any MP in Parliament. Neither he nor Hargreaves Lansdown made political donations, he added.
Referring to the row over corporate tax dodging, Hargreaves cited a 2011 ActionAid survey showing that Hargreaves Lansdown was one of just two FTSE 100 companies that did not use offshore subsidiaries to cut their UK tax bill. ‘Why do we never hear about that?’ he asked.
As well as paying its taxes, Hargreaves Lansdown is boosting the economy by employing more people. Staff numbers rose by 80 to 717 last year. Many of the new recruits are in IT reflecting the big computer system changes it expects to make if the Financial Services Authority proceeds with plans to stop investment platforms from taking a share of the annual charges of the funds it sells.
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