Callum Anderson

I beg to move, That this House has considered Government support for retail investment. It is a pleasure to serve under your chairship, Mrs Hobhouse. I thank my hon. Friend the Economic Secretary to the Treasury for joining us today and for her continued engagement on this subject, and I thank hon. Members from across the House for making time for the debate. I am grateful for the opportunity to raise the matter of retail investment in the UK stock market. This is about more than just the financial sector or the City of London; it is about how people across our country, from Sunderland to Swansea and Buckingham to Bletchley, can build more secure financial futures while helping the UK economy to grow. When people use their own money to invest in shares, Government bonds or other regulated financial products, that is a force for good. It gives them agency and an opportunity to own a stake in the companies that they work for, buy from and depend on in everyday life. At its best, it allows people from every corner of our country to share in the success of our economy, to grow their wealth, to build financial resilience and to prepare for life’s great milestones, such as weddings, and unexpected moments. Retail investment does not just help individuals; it helps companies, too. The capital that individuals invest provides the fuel for companies to expand, innovate and create jobs in every part of the UK. That is good for productivity, wages and Britain’s international competitiveness. Having more individual investors also strengthens our financial markets. They bring more stability, deliver more liquidity to our capital markets and provide a stronger base of support for UK quoted companies, making them more resilient to global shocks—be they pandemics or unexpected impositions of tariffs—and better equipped to focus on building their commercial offer. The UK has a proud history as a global financial centre. We attract capital from across the world, and we should be proud to do so. We used to pair that with high levels of retail participation by British citizens, but sadly that has changed. The data paints a stark picture. In the early 1960s, individuals in the UK owned, by value, a little over half of all shares traded on the London stock exchange; today that figure is barely 10%. At the same time, overseas ownership of UK shares has risen to almost 58%. What is more, according to studies from the London-based New Financial think-tank, the proportion of UK households that directly own shares has halved in under two decades, from 22% in 2004 to just 11% in 2022. That is far below the proportion in many developed countries, such as Sweden, where over a fifth of households own shares. There are many interconnected reasons behind those trends, and I do not propose to examine each in detail right now. Of course, some people simply cannot afford to invest, particularly when the cost of living remains high; others feel that they do not know where to begin or do not trust the system to work for them; and many are simply more comfortable with cash, even though it often fails to keep pace with inflation.