10 Downing Street
Prime Minister and Chancellor challenge UK investors to create an ‘Investment Big Bang’ in Britain
- Also published by:
- HM Treasury
The Prime Minister and the Chancellor call on the UK’s institutional investors to seize the moment for a ‘Investment Big Bang’ to boost Britain’s long-term growth.
In an open letter to industry, they challenge UK institutional investors to consider investing a greater proportion of their capital in long-term UK assets - from pioneering firms to infrastructure - enabling pensions savers to access better returns and support an innovative, greener future for the UK.
The Prime Minister and Chancellor believe that now is the time to unlock the hundreds of billions of pounds sitting in UK institutional investors and help drive the UK’s recovery from the pandemic.
The letter, co-signed by the Prime Minister and Chancellor, says:
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 want to see UK pension savers benefitting from the fruits of UK ingenuity and enterprise, being given the opportunity to back British success stories, and secure higher returns and better retirements.
Currently, global investors, including pension funds from Canada and Australia, are benefitting from the opportunities that UK long term investments afford, while UK institutional investors are under-represented in owning UK assets. For example, over eighty per cent of UK defined contribution pension funds’ investments are in mostly listed securities, which represent only twenty percent of the UK’s assets.
The Prime Minister and Chancellor recognise that choosing which assets to invest in remains a matter for pension fund trustees and other institutional investors, but urges them to consider whether they could invest more UK assets that require longer-duration investments.
This challenge comes alongside the action the Government is already taking to remove obstacles to long-term illiquid investment within the UK, by setting up the UK Infrastructure Bank and introducing flexibilities into the cap on fees that defined contribution pension schemes can charge. The Government is also working closely with regulators to ensure a supportive regulatory environment – for example, with the support of the Productive Finance Working Group, the Financial Conduct Authority will launch a framework for a new vehicle for long-term investment, the Long Term Asset Fund. The government remains open to addressing further barriers where they are identified.
This letter comes ahead of the Investment Summit in Downing Street in October.
Andy Briggs, Group CEO Phoenix Group, yesterday said:
We welcome the challenge letter issued by the Prime Minister and the Chancellor of the Exchequer today. Phoenix remains supportive of directing substantial long-term investment into infrastructure and housing, as well as providing early stage capital for companies, across all regions of the UK. We will continue to seek the best possible outcomes for our customers and our shareholders, and believe that investing in a sustainable long-term manner across a range of asset classes delivers this whilst also supporting the UK to build back better and greener.
Anne Richards, Chief Executive of Fidelity International, yesterday said:
As both an asset manager and DC provider, we are committed to achieving the best outcomes for our clients and can see the benefits of making long term, less liquid assets available to both our DC and retail customers. We also believe our customers will welcome more choice and access to a wider investment universe. Making this a success will require a collaborative approach from a policy, regulatory, tax, industry and wider stakeholder perspective and we welcome the opportunity to work together to make it a reality.
Chris Cummings, Chief Executive of the Investment Association, yesterday said:
Opening up access for investors to long term projects such as infrastructure and new technologies is a positive move that will benefit pension savers, while at the same time boosting the supply of much needed productive finance for the UK economy. It is welcome news that the government sees this opportunity and is working to make it easier for institutional investors to invest in the country’s long-term growth. Certain retail investors should also be allowed to access the same opportunities as well. The IA pioneered the proposals for the Long-term Asset Fund and it is heartening to see FCA framework for the LTAF now under construction as it will provide a significant new way for investors to benefit from illiquid investments. Getting this right will require a new partnership between the regulatory authorities and industry to ensure that pension funds, and retail investors, have access to transparent, well governed funds that return good value for money. The industry will look to work with pension scheme trustees, and their advisers, to deliver these outcomes.
Latest News from
10 Downing Street
Prime Minister announces Appointments Secretary13/08/2020 15:03:23
The Prime Minister has announced that he has appointed Mr Richard Tilbrook to be his Appointments Secretary.
UK and US announce new energy partnership07/12/2022 11:15:00
The UK and US will work together to increase energy security and drive down prices, as part of a new energy partnership.
PM call with Prime Minister Edi Rama of Albania: 1 December 202201/12/2022 16:25:00
The Prime Minister spoke to Albanian Prime Minister Edi Rama this afternoon.
Ukrainian families join Downing Street Christmas switch-on01/12/2022 10:10:00
Ukrainian families joined the Prime Minister at 10 Downing Street on 28 November as he turned on the street’s Christmas tree lights.
Prime Minister hosts festive street market to showcase British Businesses01/12/2022 09:05:00
Downing Street transformed into a festive street market to showcase the best of British businesses from across the UK
Prime Minister: “freedom and openness have never been achieved by standing still”28/11/2022 16:20:00
Prime Minister Rishi Sunak will deliver his first major foreign policy speech at Guildhall in London this evening.
PM meeting with President Ramaphosa of South Africa24/11/2022 10:15:00
The Prime Minister met South Africa President Cyril Ramaphosa yesterday at Downing Street.
PM: UK and South Africa will turbocharge growth together23/11/2022 14:10:00
UK and South Africa commit to unlock investments for major infrastructure projects and green hydrogen.