Don’t force us to invest in UK, City warns Labor – POLITICO

Biggins argued that rather than forcing schemes to invest in British assets, the government needed to do a better job of encouraging investment in British companies.

“Although global stocks have outperformed UK shares in recent years, the solution is to encourage investment in productive finance in the UK through measures such as reintroducing dividend tax relief or abolishing stamp duty (on share trading) – not by coercion,” he said.

The Capital Markets Industry Task Force, a group of firms advising on capital markets reform, has already called on the government to scrap penalties for trading in UK stocks and shares.

He warned that the UK is lagging behind its G7 economic peers due to decades of underinvestment and needs to direct billions into key areas such as housing, water, energy and venture capital that helps grow start-ups.

A Treasury spokesman cited Peel Hunt data showing that in 1998 British pension funds invested about 44 percent of their capital in British shares – compared with just about 4 percent today.

“We want to unlock more investment to help grow the UK economy and deliver better returns for savers,” the spokesman added. “In the Pensions Review we are looking at ways to effectively achieve this by working closely with the pensions industry.”