Former Bank of England chief economist Andy Haldane has called for “boldness” from the Government to boost investment in UK companies and help stop the exodus of British-listed firms abroad. Speaking at the British Chambers of Commerce (BCC) global annual conference in London, Haldane – now president of the BCC – said the Government must act to shift investment into UK businesses by “deploying the huge stockpile” of savings, pension and investment fund cash “more effectively”.
Only 5% of UK Household Assets Support British Businesses
Haldane highlighted that UK households hold financial assets of around £9 trillion, “more than enough to finance business Britain, but right now only a tiny sliver of that £9 trillion is being recycled into supporting British business.” He added: “Only around 5% or less is making its way into nourishing British businesses.”
UK Pension Funds Lack Home Bias
Haldane noted that other countries have a “home bias” towards investing in their domestic companies. “The UK’s pension fund system, big and mature, is the only pension system in the world on the planet that does not have such a home bias towards British businesses, it’s the ultimate irony that Canadian, Dutch, Australian pension funds invest more in British companies than do British pension funds.”
Tax System Changes Needed
Haldane said changes would be required not only in pension fund investing but in the tax system. “If the Government wishes to act at speed and scale, and it surely needs to do both of those things… (it) will require this level of boldness of thinking.”
Risk of Losing More Companies Overseas
In his BCC speech, Haldane warned that the UK risks losing more valuable companies overseas unless it makes the UK more attractive and bolsters investment in British businesses. There has been a flurry of UK firms switching their primary listings overseas in recent years, including big names such as Paddy Power owner Flutter Entertainment, which now plans to quit the London market altogether. “The UK has lost over 100 listed companies with a market cap in excess of £100 million since 2024,” Haldane said. “We simply cannot afford to allow the continuation of overseas stripping of our greatest growth asset… on this scale.”
Haldane – reportedly among economic heavyweights recently brought in to advise Andy Burnham, who has emerged as the frontrunner to replace Sir Keir Starmer as Prime Minister – emphasized the urgency of the situation.
