Britain must be more competitive to attract investment from UK pension funds, Nikhil Rathi, chief executive of the Financial Conduct Authority, has warned.
The watchdog boss pointed to a ‘sharp decline’ in UK pension and insurance funds backing British business.
More than half of the money in Britain’s pension funds was invested in UK stocks in 1992 compared with less than 2 per cent today.
Rathi blamed changes in the treatment of dividend tax, accounting rules and global economic shifts, and said ‘the UK has to compete’ to win back the investment.
Blame game: Nikhil Rathi (pictured), chief exec of the Financial Conduct Authority, pointed to a ‘sharp decline’ in UK pension and insurance funds backing British business
At the global investment summit in London, the former London Stock Exchange chief said rule changes were only ‘part of the answer’.
He said scrapping the stock market’s standard and premium listing segments and replacing them with a single category with one set of requirements would make it easier for fast-growing start-ups to float in London.
He said boosting the UK’s attractiveness requires commitment ‘from all parts of the ecosystem’. It came amid fears over listings in the City.
British microchip designer Arm is to float on Wall Street rather than London, with Japanese owner SoftBank said to be put off by City rules.
Fintech star Oaknorth warned it would float in New York, not London, and £30billion building materials giant CRH is to move its shares to the US.
Chancellor Jeremy Hunt yesterday faced a grilling from Parliament’s Treasury committee where he was asked about the snubs.
He was also questioned about how the UK will respond to US’s Inflation Reduction Act and the EU Green Deal Industrial Plan – climate-focused programmes.
MPs fear they will lead to more major companies snubbing Britain. Hunt set the stage for a bumper autumn Budget which will help the UK ‘remain competitive’.
He said the Treasury was doing ‘very detailed’ work on a response to the US act, and that he was doing ‘a lot of work’ to address lack of investment in the London Stock Exchange.
He said: ‘Although there are some well-publicised stories of companies choosing not to invest in the UK, we are the world’s sixth-largest economy.’
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