Capital flows through London like the Thames. Don't divert it

FINANCIAL capital flows through London like the River Thames, which has functioned as a conduit for commerce over centuries. But too much of that capital is flowing off elsewhere these days when there are world-beating ideas to invest in within yards of the Thames’s towpath.

- James Ashton

We have the perverse situation that the vast majority of our pension savings are being used to back companies outside the UK. That far-flung search for returns is designed to make for happy retirements, but funding global competitors so enthusiastically will only challenge the quality of life for our children down the line.

This is not a Little Englander point. After all, the best British companies adopt a global mindset from day one. To fulfil their potential, they need ready sources of capital at home.

That’s why so much effort is being focused currently on funding growth. That could be through the Lord Mayor’s mooted Future Growth Fund, a £50 billion pot skimmed from defined contribution (DC) pension schemes in order to back start-ups before they are ready for the public markets.

Or it could involve retooling the Pension Protection Fund, the lifeboat for defined benefit (DB) schemes, as a superfund that can take on more risk and buy more equities. Plans are also afoot to lift some Solvency II regulations.