Boris Johnson and Rishi Sunak will on Thursday challenge UK-based investors to invest in more “British success stories” in order to fuel the economy’s post-pandemic recovery.
Sky News has learnt that the prime minister and chancellor will issue a joint rallying cry aimed at “igniting an Investment Big Bang” that would “unlock the hundreds of billions of pounds sitting in UK institutional investors”.
In a letter to institutions, the pair will say that British pensioners risk missing out on “better retirements” because too small a proportion of their pension funds is being invested in long-term UK assets.
“The United Kingdom’s economy possesses a rich pool of assets ripe for long-term investment and bolstered by a world-leading research sector, commitment to the green technologies of the future, and British entrepreneurial spirit,” says the letter, a copy of which has been seen by Sky News.
“Yet while global investors, including pension funds from Canada and Australia, are benefiting from the opportunities that UK long-term investments afford, UK institutional investors are under-represented in ownership of these assets.”
It said that 80% of UK pension fund investments were allocated to listed securities, which represent just 20% of UK assets.
Mr Johnson and Mr Sunak said the government’s Green Industrial Revolution and Innovation Strategy would aid its objective of ‘Building Back Better’, but that an Investment Big Bang was required to fuel the UK’s recovery.
“It’s time we recognised the quality that other countries see in the UK, and back ourselves by investing more money into the companies and infrastructure that will drive growth and prosperity across our country.”
“We recognise the responsibility of the government to remove obstacles and costs to making long-term, illiquid investments in the UK.
“The government is going everything possible – short of mandating more investment in these areas as some have advocated – to encourage a change in mindset and behaviour among institutional investors, and we remain open to addressing further barriers where they are identified.”
The PM and chancellor said investment decisions “remain a matter for pension fund trustees, and other custodians of institutional capital”, but added: “We strongly believe this is a question that all institutional investors should be considering.”
They added that an investment summit would take place in Downing Street in October, and told investors that invitations would be extended to “those institutional investors who are willing to make specific commitments to invest more in Britain’s long-term growth”.
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