This is an article by Daily Mail business writer Ruth Sutherland about James Ashton and hit take on investment in the UK – pension investment in particular. It come a couple of months before the budget and I hope is influential in directing investment into quoted British companies. Thanks to James and Ruth for this, you can read the original here.
James Ashton
James Ashton, champion of the UK’s small stock market companies, has a message for Andy Burnham and his Chancellor John Healey: we need to start investing in ourselves.
In particular, we need to stop selling off our companies at bargain-basement prices to overseas and private equity buyers.
Ashton, 51, is coming to the end of a four-year stint as chief executive of the Quoted Companies Alliance (QCA), which represents small and medium-sized companies listed on the London stock market.
These firms, he argues, are hugely important for national prosperity and we fail to appreciate their worth at our peril.
He is concerned that so many companies have been snapped up by predators, including easyJet, testing group Intertek, energy marketing company DCC, Tate & Lyle sweeteners, outsourcing firm Mitie, and Teesside-based pawnbroker Ramsdens.
James Ashton is concerned that firms like easyJet are being snapped up by predators
‘In this summer of takeovers it is really important to remember that a share quote is an anchor in the UK for jobs, for intellectual property and for tax,’ he says.
‘Look at Ramsdens. It is not in the business of AI or any of the things we are meant to get excited about. But it is a company that came to market around 10 years ago and it has grown, opened stores and hired more people.
This is a critical question for Healey, he says, adding:
‘In the Budget I would like the Chancellor to look into the question: why don’t we invest in ourselves? And why do we undervalue our own companies?
‘Every month I have been in this job we have seen a reduction in the number of companies trading shares in London. That is 45 consecutive months of decline.
‘Private equity and overseas buyers are picking off UK companies because they are going incredibly cheap, because we aren’t backing ourselves, because we have too much money under the mattress and because our pension funds are busy building world-leading companies abroad. We need to change that.’
He is expected to move on to a new role soon, probably running another industry body.
He advocates making the tax relief pension funds enjoy conditional on their investing in the UK, saying:
‘We offer tens of billions of pounds of tax relief to pension funds with no strings attached. Other countries incentivise investment in their economies. Everybody else is wise to this”.’
‘But,’ he says, ‘what is also in the best interest of a retiree is a road not full of potholes, schools that are not closed and high quality jobs for their grandchildren.
‘It is about the sort of country we want to live in. This is why I am hopeful for John Healey as Chancellor.
‘He was defence minister so he knows what it is to invest for national security and resilience. This is in the same vein. We want to build companies in all industries. I would like to see a real focus on that in the Budget.
If you want good growth in every postcode, you have to do this. It is about being more positive about being British. Britain has to bring that pension money back home.’
James Ashton is chief executive of the Quoted Companies Alliance
Ashton has pushed campaigns to bring down the costs and regulatory burden on smaller listed companies. These include calls for the scrapping of stamp duty on share dealing in the UK, for which the Mail is also campaigning.
He is also lobbying for reforms to audit regulation and governance that will reduce the burden on smaller companies, which he argues is disproportionate compared with larger ones.
Another bugbear is the ever-expanding annual report, which now averages 98,000 words long. He says:
‘No government is going to win votes by saying we are shaking up the audit market, but that doesn’t mean it shouldn’t be done.’
Ashton points to semiconductor and chip design company ARM as the type of business the London stock market would ideally never have lost. He has even written a book about the company – The Everything Blueprint: The Microchip Design that Changed the World – published in 2023.
Founded in Cambridge, this hugely valuable business was a constituent of the FTSE 100 index and had a dual listing in New York.
It was taken over by Japanese conglomerate SoftBank in 2016 in a £24billion deal, taken private then re-floated on Nasdaq in the US three years ago. ARM’s market capitalisation is £191billion and if it were listed here it would be the second most valuable company on the FTSE 100 after HSBC.
Ashton says:
‘ARM was a big watershed. But, from a positive point of view, it was on the London market for 18 years, it still has the best part of 4,000 staff in Cambridge and it still calls Cambridge its world headquarters.’
Despite a good long-term record, the trust has struggled in the past five years and the investment trust sector as a whole is under siege from US predator Boaz Weinstein and his vehicle Saba.
‘With investment trusts, of course there are challenges, but they are another of London’s unique assets,’ says Ashton.
‘On Finsbury we like to think Nick has assembled a portfolio of companies that are world-beating in their field, such as Relx, Games Workshop and Unilever.
‘Why doesn’t that story cut through? It is about how we all talk about Britain’s prospects.
‘It may be something in the British psyche. But the best investment has got to be close to home.
‘If a company is really present and visible in your community, why shouldn’t you buy shares?’
