London Stock Exchange: Decline in UK Funds

Baroness Neville-Rolfe Excerpts

Thursday 13th February 2025 Lords Chamber

Asked by

[Baroness Neville-Rolfe]

To ask His Majesty’s Government what assessment they have made of the net £9.6 billion decline in investment in UK funds in the London Stock Exchange in 2024.

[The Financial Secretary to the Treasury (Lord Livermore) (Lab)]

My Lords, there has been a net decline in investment in UK funds for the past nine consecutive years. This is, of course, a matter of concern, although this does reflect global trends, and the outflow in 2024 was £2.5 billion less than in 2023. The UK’s capital markets remain some of the strongest and deepest in the world, and the UK is a leading centre for international capital raising, last year raising over £20 billion of equity capital—more than the next three European exchanges combined.

[Baroness Neville-Rolfe (Con)]

My Lords, I was very glad to visit the stock exchange this week with other parliamentarians from the Industry and Parliament Trust. The stock exchange is important to national economic welfare. It is therefore unfortunate that the Government have scrapped the last Government’s plan for a tax-free Great British ISA, incentivising savers to invest in British stocks and shares. How does the Minister intend now to encourage people, including first-time investors, to invest in such shares?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question and for telling us about her first-hand experience this week. She may know that feedback from industry and consumers on the last Government’s proposed Great British ISA was mixed at best, and no clear value-for-money case was made for that, so, as she says, we will not be proceeding with it. But as she will know, at the Masion House speech the Chancellor published the interim report on the pensions investment review and launched consultations on measures that would deliver a major consolidation of the defined contribution market and local government pension schemes. They could unlock around £80 billion for investment in private equity and infrastructure, but of course, there is no guarantee that that will be invested in UK markets, as she says. The pensions review is absolutely committed to looking at further ways in which that can be achieved.