On January 21 at Davos, M&G announced plans to invest more than £1 billion in the UK over the next three to five years. The firm stated that the money would go into affordable homes, regeneration, infrastructure and innovative companies through two new funds, drawing on its Life business, the British Business Bank and the Local Government Pension Scheme.
Rachel Reeves, then Chancellor, presented the pledge as the payoff from her reforms. She said it was “exactly what our pensions and investment reforms are designed to unlock”. Reeves also highlighted a separate £500 million investment by the Belgian biopharmaceutical company UCB in UK research and manufacturing in Surrey, and presented the two commitments together as £1.5 billion of new private investment.
Nine months later the same company told the new Chancellor that the core problem has not been fixed. Andrea Rossi, M&G’s chief executive, wrote in the Sunday Times that the “decline of London’s stock market” is “a problem for Britain.” The Capital Markets Industry Taskforce, chaired by London Stock Exchange chief executive Dame Julia Hoggett, warned Chancellor John Healey that the UK risks becoming an “incubator nation” for companies that start here and list abroad. The Autumn Budget is on Wednesday October 28, the first from Healey.
Companies continue to leave the London stock market
The value of bids for UK-listed companies this year is at least £70 billion. Beazley and Schroders, both previously London-listed, have left the stock market after takeovers. The measures introduced in the November 2025 Budget, a three-year stamp duty holiday for newly listed shares and ISA changes to push savers towards UK equities, target new listings. The problem now is that existing companies are leaving.
The taskforce’s main proposal would abolish the 0.5 per cent stamp duty on share purchases for pension funds and ISAs rather than for everyone. The tax is one of the reasons companies cite for looking elsewhere. Nikolay Storonsky of Revolut has previously called a London listing ‘not rational’ because of the 0.5 per cent stamp duty on share purchases.
The tax raises about £3 billion a year. The taskforce estimates its package would mobilise £161 billion of capital by 2042 at a cost of up to £1.28 billion a year over 15 years. Rossi’s own proposals overlap: reconsider stamp duty on shares, use the tax system and default pension funds to steer more domestic savings into listed UK companies, and make a UK listing a condition of taxpayer support such as grants, contracts or subsidies.
M&G has a direct interest in a healthier London market. The company says it has more than £100 billion invested in the UK, including £23 billion in UK listed companies. Its UK page still describes the £1 billion as a target. The UK Social Investment Fund was set to launch with £130 million of initial commitments from Scottish Borders Council Pension Fund and M&G’s With Profits Fund.
M&G’s own results remain strong
M&G reported a record first-half operating profit of £435 million, up 15 per cent year on year, and net inflows of £2.4 billion. In January Rossi said M&G was “poised to build critical infrastructure, support the growth of British businesses, while laying the foundations for a more productive, sustainable economy and stronger communities across the country.” This autumn he wrote that “our public markets are a national asset supporting businesses, jobs and investment across the country.”
M&G’s chair, Sir Edward Braham, is a non-executive member of HM Treasury’s board, but the firm does not have a formal advisory role to government. Nine months is short for a three-to-five-year programme in housing and infrastructure. Slow deployment would be normal for this kind of capital.
The October 28 Budget test on stamp duty
This week Healey pointed to the IMF singling out the UK as the country that stands out for plotting a path to lower borrowing. The Treasury, declining to comment on Budget speculation, said it continues to evaluate stamp taxes on shares “to ensure the UK is positioned well for the future.”
The test on October 28 is whether Healey acts on the stamp duty proposals or leaves the market reforms where Reeves left them. The company the previous government held up in January as proof its reforms were working has made it clear to the new Chancellor that the problem has not been fixed.
Author: Tejas Bansal
