Govt rejects Lords’ call for AIMs in ISAs

The Treasury has again rejected calls to allow more alternative investment market (AIM) shares in individual savings accounts (ISAs).

During an oral questions session today, Francis Baring, the sixth Baron Northbrook and former Barings analyst, asked if the government would consider allowing more AIM investments in ISAs.

Lord Northbrook said the coalition had pledged to boost investment in small businesses and could do this by allowing AIM investment through ISAs.

He also questioned the logic of allowing AIM investment in self-invested personal pensions (SIPPs) but not in ISAs.

Lord Sassoon, commercial secretary to the Treasury, said the government could not risk damaging the trusted ISA brand with such a move.

"ISAs have been a very successful product. We need to protect the ISA brand and the products within it," said Sassoon.

"The government has taken a range of measures for small businesses."

He added the liquidity requirements for SIPPs and ISAs are very different, due to the requirement on ISAs to allow investors access to their funds with 30 days' notice at most.

Lord Sassoon's comments echo those of financial secretary to the Treasury Mark Hoban, who in 2010 defended the government's stance on the investments.