Ditto for UK's politicians. You don't have to show you've a track record of running a successful area or region. You just need to sleep with the right people.
In the UK, all our PhD graduates are looking for jobs in investment banking or moving abroad where the opportunities in their field are. Our banking sector is a leech to any sustained growth.
Singapore also has a lightweight but effective regulatory environment. Lots of biotech is coming out of UK research, but it's almost impossible to get a business off the ground to exploit that research. Singapore is a prime destination for those researchers trying to start their own business.
If you like Singapore? Go live there. Singapore is expensive place to live. No public services. No worker rights & NO human rights record. So do you homework before thinking we should be like Singapore. What do you think the TORYS tried to do to our economy in UK over last 15yrs+. Sunak tried it. But they found out VARY quickly that we the people rely on our well funded public services. And don't won't a ruffless Singapore model
So refreshing to hear this conversation. I'm not a financial expert but you can feel the slow rot in this country. As Andrew said, how was none of this a major topic during the election?!? We're slow walking into a deeper disaster.
No I think it has been corporate policy to asset strip the nation for much of the last 20 years, and the financial centre has been a major cheerleader.
it was something labour were saying and the tories did not want to engage because of their disastrous 14 years slow growth 2/3 of under new lab ) wage stagnation (longest for 200years) vastly lower investment than comparative countries (forgotten teh comparative figures but its a shocking differential ) , all the growth gone to a few 4 times the wealth for the richest 1000 people even people 3/4 of teh way up the income scale stagnant
Pretty much, product managers, project managers, program managers, all paid higher than engineers, so nobody wants to be an engineer after 25. I work in a niche IP company right now and it's insane the lack of tech knowledge from the middle upwards as products endlessly fail and the company chases the current thing trending on linkedin each year, with the loss of entire departments as the company seeks to reduce costs from a lack of sales.
Why would I buy a smaller companies UK fund/trust? - 0.5% stamp duty on purchase. - 1-2% annual management fees - 40% tax on my 3% dividend yield = 1.2%/yr in additional tax drag - 20 years of under-performance vs the world - High exchange spreads - Dire UK productivity, with no relief in any projections - Taxes on UK businesses rising. Alternatively i can go buy a big global ETF with zero transaction and holding cost and only a 0.1% management fee and much higher tax efficiency via lower dividends. Not hard to see why UK stock investment is dead. And the chancellor has the sheer gall to go and tax share gains even further
I’ve been saying this for decades! We need major tax relief of 30-40% if we were to hold a uk based index fund for a minimum of 10 years. This mitigates the risk of low returns and underperformances!
I think the only way to address this is slowly and by leaning on the UK underweight. Do this by waiting for the small UK tigers to breach the ETF trading barrier. Some something like a 50/50 US/UK ETF index fund with low fees and tax wrappers (SIPP/ISA).
@@Abdul_Rahman86 Increasing CGT further but discounting gains wrt inflation, and scrapping stamp duty would go a long way to help. Napkin math suggests the government takes more off you after 20 years with the current 24% CGT rate than at a 40% rate where gains are indexed (assuming a 8% annual total return and 3% inflation). The indexed version is better as soon as you hold stocks for ~2 years or more Inheritence tax is the same. We're effectively taxing inflationary (imaginary) 'gains' on real assets (homes). A home today is still worth one home in 30 years, it's wages and labour that are losing value. Homes are not gaining value, you just have to look at inflation adjusted median home values over the last 15 years to see this
You're literally just typing out his point. His point is, we need to change as a country we're setup for only the super wealthy to be able to operate with all the regulation/taxes/etc.. and we should all be taking our economy more seriously and get educated on it then invest in it... His point isn't "invest in failure". or even worse Gary S options.
BBC used to be my channel of choice for information but it has been so dumbed down I cannot bear to watch it and BBC Radio 4 has also been dumbed down. Well done for arranging this interview.
Agree. TV is a begging box to keep you happy and the news is full of non news stories.... Sadly it starts at the bottom, We've dumbed down education........ and lost our patriotism
15:01 Almost $1trillion in profits is syphoned out of the UK to foriegn companies mainly Wall Street every year increasing year after year. This is about 30% of the UK GDP.
ARM Holdings: world-class semiconductor company based in Cambridge, yet now owned by Japanese Softbank. A national scandal. I hold some UK stocks, but 75% of my portfolio is in the US. Brexit was the final straw for me. Your man's bang on: we can't be honest with ourselves (or even be bothered to put the effort into having the awareness) that there's a serious problem with our economy and the knock-on consequences that has for our society.
Not just ARM Holdings, but also ASDA, Boots, Cadburys, The AA, LV Insurance, P&O, etc. They were, for the most part, profitable, but the pensions and large corporate holdings wanted a quick buck rather than long term income for pensions. Successive governments of all leanings have failed to protect British brands, and jobs, from corporate raiders.
our politicians are not economists , they have not had real jobs or run a business! WEF and WHO have them in total control, they have systematically destroyed the Western economies on purpose…. The Trudgen Horse is in out Government.
The government needs to incentivise us to invest into UK equities. Tax relief of 35% if we agree to hold uk equities for a minimum of 10 years in a SIPP
Exactly right, we are hollowing out our own society and wondering why we are in a mess. All the structural stats ( the real dashboard in front of us as we drive the economy along) are screaming poor performance for decades - lousy growth, poor r&d, poor productivity, poor infrastructure, lack of investment, low nos of robots/automation, poor translation of science to spin-outs, poor domestic high growth med co's, weak innovation management skills etc etc etc. And then our politicians wonder why there is a problem!!! It's never discussed in elections despite it all staring us full on in the face.
ARM Holdings are no longer owned by Softbank and is publically quoted not on the London SE but on New York Stock Exchange. You cannot invest in them through a UK Stocks & Shares ISA though, so more difficult to invest in as a UK citizen in high tech...
I agree that it's an absolute national disgrace that the UK has been run for rentiers and not entrepreneurs. The political class has a huge responsibility for this, both Labour and Conservative, but mainly the latter because they're "supposed" to know better, but the last 14 years put the lie to that idea. And now the Tories are being led by the most incompetent business secretary of the past 5 decades! God help Britain.
Thank you as always guy's for another brilliant podcast. I subscribe to around 10 financial educational channels such as yourselves, and I've seen Andrew Craig on a few of them, and course on his own channel. This guy is an extremely important man, someone whom I believe to be a true trailblazer. Andrew Craig, and people like him, NEED to give every tool possible to try and fix some many of our country's financial problems.
The Irish GDP per capita is not what it appears to be...... being a tax haven for Apple and Microsoft does not translate to a better life for the people.
Spot on. There are 2 areas that have benefited in the last 30-40 years and that is entry level pay and CEO pay (and by extension the rest of the C suite). This has come from the middle level pay. I researched from the time when I started work with my pay rate and compared it to current minimum wage. Now entry level pay is 5x what mine was in 88 but mid level pay has only risen 2.7x. CEO wages are off the chart ridicules. Now you have CEOs paid millions but they do not produce 50 to 60x profit per person than their mid level staff do. From first principles you only spend money in a business when it either reduces cost or makes money. So the claim CEOs need that remuneration is false because they don’t create the additional income it savings themselves. The cult of the CEO needs ending and start paying them sensible salaries and paying that saved money into the business and the mid level. Won’t happen but it should.
I heard the Irish finance minister discuss what they were spending on and what money was being kept back for a rainy day. Sounds like better v UK where spending gets cut and deficits run up.
He didn’t talk about private equity. Most smaller tech firms in the UK are owned by private equity firms, basically off market and not accessible to the average joe. Not sure how much pension funds are invested in private equity.
Yeah - I worked for Jewson the builders merchants and they got taken over by private equity - the same lot that gutted and then sunk Debenhams. They then cut cut cut and god knows what’s left
It’s so refreshing to listen to another intelligent conversation regarding finances & shares etc. This one in particular has kept me glued all the way through. Perhaps I should diversify my portfolio..
The reason most people are not interested in investing is that they haven't got the money or time and governments are generally quite happy to keep us like mushrooms in the dark fed on rubbish. Gambling is also more attractive. Education, education, education
Investing for the average Joe is essentially gambling as no average Joe has the capability to perform due diligence in a rigged market. Yes, markets are rigged.
We've also lost: 1. DeepMind to Google. 2. RareWare (Goldeneye, Perfect Dark, Killer Instinct, Battle toads, Donkey Kong Country) to Microsoft. 3. DMA Design (Grand Theft Auto) to Rockstar. 4. SI Games (Football Manager) to Eidos and then SEGA.
I said this the other day, most people couldn't name 10 tech startups in the UK... People are wondering why we're poorer, and think it's the 'super riches' fault. No it's our government anti-business policies and regualtion that has destroyed it. We don't create anything, we're just running a ponzi scheme on people.
Don't it gets me so angry... people blame the 'super rich' and it's not even their fault. Our governement has made it almost impossible to operate with the regulation and taxes... espiecally if you're small and trying to grow. We lose all our skilled workers, we lose the good tech companies... we've been running some ponzi scheme instead with ever increasing numbers to make up for it. Yet some guy that owns assets is considered the problem, blame your government not them.
Hello, I'm a Doctor from Scotland, how do you make such amount? I'm a born Christian but sometimes I feel so down of myself because of low finance but I still believe in God.
Making touch with financial advisors like *Janice Isaac Owen* who can assist you restructure your portfolio, would be a very creative option. Personal financial management will be crucial to navigating the next difficult times.
Unfortunately, not all of us were financially literate early. I was 35 when I finally educated myself and started taking steps. I went from $176,000 in debt with zero savings or retirement to now, 2 years later, fully debt-free and over $1000,000 net worth. I know that doesn't SOUND like a lot, but I'm incredibly proud of it. Now I'm fast-tracking my wealth building (investing $400,000 annually) and don't owe a dime to anyone. It's a good feeling!
You are absolutely right, we also have lot's of expert, real ones with certificate and firms IDS out there waiting for investors to invest and experience the best of trade.
Our country doesn't even allow the prenatal polygenic screening of embryos during IVF treatment. Britain will miss the Bio-Tech revolution, just like it missed the Tech revolution. Guaranteed.
When it takes weeks for the scan results of a cancer patient to be given to his doctors, you know it's hopeless. Of course, he could have gone private and got his scan within hours. Just like in NHS dental "care". Anyway, he died before he got his results.
Uk pensions primarilly invest into Treasuries and that is why our oensions have not performed over last 10 plus years. Inaddtion, British schools don't even teach kids, teenagers in particular, how to manage your monthly income and running your own home financially. Shocking.
I used to be a supply teacher but I no longer do it as agencies are still paying the 2008 rate so its not worth doing anymore. They have slightly raised teaching assistant rate to match minimum wage but the teaching rate is stagnant. I told my last agency to buy a calendar. In the media they talk about mainstream teachers not being paid enough but there's total silence on the rates of pay for agency work, not just teachers. I often get enquiry emails offering me work but I just block them now. All that work as a teacher and all that investment in qualifications is not worth a penny. 2 of my 3 kids have a degree but I have told my last one to not bother as it is now a total rip off - especially with the prices going up - and a waste of time as many employers aren't bothered about it anymore. I'm 57 and still paying student loans, its all a sick joke on people!!!
Interesting interview, but there are many reasons besides stock market investment that restrict U.K. growth compared to US. Look at VC funding, regulation, costs (energy, commercial property, business rates).
The Irish Government provide GNI figures instead of GDP . The reason is they are factual and not distorted. They still look better than anything in the UK.
13:37 "A much better policy" is one way to put it. The reality is that Ireland has one of the lowest corporate tax rates in Europe and a relatively small population (around 5 million), making it an attractive location for large corporations to establish their headquarters. With the UK’s significantly larger population, it can’t compete on corporate tax in the same way.
Night and day compared to the chap a few weeks ago peddling stock picking over index. Much more compelling as to why we need to refocus capital for the greater good as well as personal returns.
Thank you for promoting CRH an Irish company one of our clients in the 1960s through to 1980s. David McCabe Dubliin director Investment Bank of Ireland
I look forward to a “making money podcast” more eagerly than looking forward to my dad walking through the front door after he left to buy milk 15 years ago. Also you brought back the man himself Andrew Craig!!!!!! I could listen to this podcast for hours and hours!!!! Now I would recommend invest in UK banks. Especially banks that look after small businesses, Lloyds, NatWest, HSBC, etc
I’ve been saying this very same thing for years and years - I’ve worked in the tech industry for over 30 years and certainly in the early to mid 90s worked for a few startups. I’ve know about this problem certainly from the perspective of the industry that I work in where some really good companies have struggled to raise investment. Two of the startups I worked for were bought in their entirety by US firms.
Not sure why people can’t except that the Uk is an industrial dinosaur. No way the top old firms of the ftse will let the government fund tech firms to take over. Not going to happen whilst there are minerals in the ground.
Brilliant episode. Biotechnology has been the future for decades, but the underpinning technological advances are staggering and I agree (disclaimer, as someone who works in the sector) that the UK is incredibly well placed given its R&D base. It is hard to predict the future especially as biotech and AI are now aligning. The US market (and the large market caps that make up the indices) is terrifyingly expensive, so personally (as both an optimist and contrarian) I do feel that investing in the UK gives great diversification, and if biotech achieves a fraction of its potential there will be benefits for investing in the UK (and its stock exchange too).
R&D in the UK is mostly derivative today. There are some good medical research projects, but not many. Few years ago they made a lot of noise over graphene and even opened a graphene research unit. But little has come out.
Still helps the Irish. AstraZeneca wanted to build a new factory in the UK, they ended up building it in ROI because the UK Government tithe is far too high .
Something not mentioned is that the increases in house prices in the uk have encouraged buy to let investing rather than investing in the stock market. Also the investors that do invest in the uk have a property mindset with an obsession with dividend yield over growth and reinvestment.
BTL is much more aggressive in the USA. 30 year fixed rate mortgages and depreciation for accounting to zero in 25 years. 1034 exchange to deferred CGT. So by logic people would flock to the USA based on the greed for more profit
Most people in the uk cannot buy a house there, so the fixed rate mortgages and CGT rules are irrelevant to 95% of UK Persons. In contrast, in the uk they have a choice of equity or housing. In the UK house prices rises have exceeded the returns of the Ftse 100 since 2000, whereas in the US the S & p 500 has done better relative to the property market. This means that people looking back and seeing returns over the last 25 year period would not unreasonably be more likely to favour housing compared to the stock market in the uk than the us.
@@andrewhunt9078 it's very easy to make predictions with hind sight. Everyone knows what last week's lottery numbers were Diversity and plan B's are required when making and investment decision. Also, look at real house price adjusted for inflation in the UK. It poor returns. The magic is in the leverage and debt.
@@andrewhunt9078 Everyone in the UK can easily buy into the S&P 500, I will never understand why someone would buy UK based stocks, they're under performers to put it lightly
When we were trying to get investment for inventions that my husband had patented, Angel Investors wouldn’t consider looking at you unless in your business plan you could state who you would be selling your company to in 5 years, this is the reality of trying to get started in the U.K.
Just because you can do a thing doesn’t mean that thing is scalable. Computers running on brain cells already exist, but scaling that to that technology being in your phone is a big leap and often never happens. I will agree we are really bad at turning all the wonderful discoveries coming out of our universities into manufactured products
The UK is underperforming for a number of reasons, and one of the biggest is excessive regulation, which wastes a lot of my time. Much of this bureaucracy comes from both central and local governments. They create policies without understanding the real-world impact on people, leaving it harder to get anything done. They need to repeal ever law introduce to back to the 1980s and then start again. A lawyer told me, that a lot of laws an regulation introduced after the Tony Blair's government. Laws drafted baldly, great for lawyers, who are the middleman earning huge hourly rate on advising clients. A recent experience with the Courts highlighted this for me. I spent 60 minutes on hold, unable to focus on other work because I needed to stay alert for when someone finally picked up. Bureaucracy has made it nearly impossible to speak to a real person anymore; everything is pushed online. That’s fine if your situation fits into the predefined boxes, but if it doesn’t, you’re left without options. If the government taxed bureaucracy, maybe we’d see less of it, and the country might actually be more productive. There are more people working from home now, but I’m not seeing any increase in output as a result.
Interesting but the claims about Ireland GDP figures detract from credibility and I’m amazed went unchallenged. Irelands GDP is hugely inflated because of its corporate tax policy and even the Irish Government caution about this. The figure often quoted in ireland is GNI.
I wanted to start a business in the UK, First of course the banks merely told me that I couldnt make anything in the UK, no one does. Then tried to use an investor "angel" and all they did was run us around for 18 months adding management overhead. The amount of money available as start up funding is near zero, the interest rates are sky high, the timescales to pay it back tiny. Then go to Germany, and well, you can borrow, the government will give you money to start, will pay you to live while you get started... no, you cant start anything here any more. The country is totally fucked by those in charge
@ggriffin325 do you want to pay CAP budget every year? If you think UK stock market is bad, you haven't take a look at EU stock markets. France is now poorer than uk
Dyson is another worthless exploiter of the British economy. Our corporation tax is literally the lowest of the G8. How these people have the gall to open their daft mouths is a feat in itself. And don't get me started on advocating Brexit before p*ssing off to Malaysia. Time to start stripping knighthoods
Dyson was a crafty guy and very disloyal to UK. Spouted Brexit to increase his market base whilst planting himself in Asia where he saw the future for his business.
What was said about the main drivers for why pensions moved more heavily towards bonds as default? Undertsand bonds and their place in portfolios but can't find why pension fund managers made the transition as he suggested
I've heard that there was a regulatory change that caused the change towards bonds from shares, but I want to hear details of what happened, when and why.
@@zzzzoijzzzzz I’m copying my old comment from a video by the FT called ‘how to reboot Britain’s capital markets’ which I recommend you watch. This is a bit of a long comment but there’s some nuance which I think is important. Our (London) stock market is what is widely perceived to be a dinosaur equity market that’s overly reliant on old economy sectors such as oil and banks which leads to my next point. On lack of exciting companies listing - we're risk-averse as a country, and the doesn't bode well for startups specialising in things like AI (the new hot topic) and quantum computing, whose large capital expenditures require years of patience. A key accelerant in the move of some listings to the US is a lack of liquidity in the UK, understandably so, if UK plc's can fetch higher valuations and a larger investor base whilst US listing rules aren’t extremely tight, why wouldn't they move? An example of this was Arm Holdings choosing Nasdaq over the LSE in 2023, this isn’t to say that breaking into the US will be easy, even though Arm have been successful in doing so. I remember reading a report on Bloomberg talking about how the UK VC's can keep up with Bay Area VC's in terms of funding for tech ventures. Funding for startups (companies valued at no more than $15m - 91% funded, $4.1bn for UK vs $4.5bn), but the moment UK companies reach scaleup status (valuations of $15m-100m), we raise $7.1bn vs $13.9bn for Bay Area which is 51%, and it gets even harder when tech companies in the UK reach breakout status (>$100m valuation) as we raise $7.8bn vs $35.2bn in the Bay Area which is 22% of funds raised in comparison to SF. Also, in the early 2000s, the UK government introduced new rules forcing retirement fund managers to be more open about their investments and about how they planned to meet future pension obligations. One result was a shift out of riskier equities - the pension industry’s preferred investment until that point - and into safer government bonds. The trend was reinforced over the following decade as millions of workers holding so-called defined-benefit pension plans retired. Pension managers doubled down on government debt at the expense of shares so they could better match their long-term liabilities to those retirees. What’s more, what little equity allocation the funds retained was put increasingly into stocks in other markets as they tried to diversify their holdings. UK pension funds held 1.6% of UK-listed stocks in 2022, down from about 32% in 1992, according to data from the Office for National Statistics. Edit: thanks to depressed valuations, London’s allure as a center for IPO activity has been diluted by a glut of alternative funding from private equity. That’s been compounded by some woeful stock performances in the wake of high-profile listings, including Deliveroo Plc, Dr Martens Plc and Ithaca Energy Plc. Meanwhile, headlines around companies leaving London for other exchanges have hurt the City’s image as a place to do IPOs. I've heard Shein want to IPO in London for around $64bn, but imo I don't think it'll revive London's capital markets the way people think it would, the company has controversial ethical + sustainability practices, as well as possible IP theft and moreover, they chose London as they couldn't file for an IPO because of hurdles to the listing in the US which is tied to the earlier point about their shady practices. We're basically 2nd choice if firms applications for US based IPO's (NYSE or Nasdaq) get rejected.
@@zzzzoijzzzzz I've commented this before on the FT's video about fixing Britain's capital markets. It is a long comment but there’s some nuance which I think is important. Our (London) stock market is what is widely perceived to be a dinosaur equity market that’s overly reliant on old economy sectors such as oil and banks which leads to my next point. On lack of exciting companies listing - we're risk-averse as a country, and the doesn't bode well for startups specialising in things like AI (the new hot topic) and quantum computing, whose large capital expenditures require years of patience. A key accelerant in the move of some listings to the US is a lack of liquidity in the UK, understandably so, if UK plc's can fetch higher valuations and a larger investor base whilst US listing rules aren’t extremely tight, why wouldn't they move? An example of this was Arm Holdings choosing Nasdaq over the LSE in 2023, this isn’t to say that breaking into the US will be easy, even though Arm have been successful in doing so. I remember reading a report on Bloomberg talking about how the UK tech struggle to keep up with Bay Area/Silicon Valley tech in terms of funding. Funding for startups (companies valued at no more than $15m - 91% funded, $4.1bn for UK vs $4.5bn), but the moment UK companies reach scaleup status (valuations of $15m-100m), we raise $7.1bn vs $13.9bn for Bay Area which is 51%, and it gets even harder when tech companies in the UK reach breakout status (>$100m valuation) as we raise $7.8bn vs $35.2bn in the Bay Area which is 22% of funds raised in comparison to SV. Also, in the early 2000s, the UK government introduced new rules forcing retirement fund managers to be more open about their investments and about how they planned to meet future pension obligations. One result was a shift out of riskier equities - the pension industry’s preferred investment until that point - and into safer government bonds. The trend was reinforced over the following decade as millions of workers holding so-called defined-benefit pension plans retired. Pension managers doubled down on government debt at the expense of shares so they could better match their long-term liabilities to those retirees. What’s more, what little equity allocation the funds retained was put increasingly into stocks in other markets as they tried to diversify their holdings. UK pension funds held 1.6% of UK-listed stocks in 2022, down from about 32% in 1992, according to data from the Office for National Statistics. Edit: thanks to depressed valuations, London’s allure as a center for IPO activity has been diluted by a glut of alternative funding from private equity. That’s been compounded by some woeful stock performances in the wake of high-profile listings, including Deliveroo Plc, Dr Martens Plc and Ithaca Energy Plc. Meanwhile, headlines around companies leaving London for other exchanges have hurt the City’s image as a place to do IPOs. I've heard Shein want to IPO in London for around $64bn, but imo I don't think it'll revive London's capital markets the way people think it would, the company has controversial ethical + sustainability practices, as well as possible IP theft and moreover, they chose London as they couldn't file for an IPO because of hurdles to the listing in the US which is tied to the earlier point about their shady practices. We're basically 2nd choice if firms applications for US based IPO's (NYSE or Nasdaq) get rejected.
Totally agree that nobody is interested in finance, even serious geopolitical experts have no clue about the elephant in the room. It is so refreshing to listen to someone who knows what they are talking about, not the media's economics editors.
Maybe one of the problems we have is that we don’t give employees equity as part of comp in the same way the Americans do? If employees have more of a stake it might encourage entrepreneurs ship at all levels of a company?
There’s a difference between where a public company is listed and the markets in which it operates. Also we’ve had ultra low interest rates the last decade so British companies have had easy access to capital other than raising equity.
In the 1980s i attended a 8 week course at a well known UK managment college. I was very disappointed at the business expertise of many of my 60 colleagues so I am not at all surprised at the steady downturn in the uk economy. Look at Ireland since 1960 when we published our first programme for economic expansion. David mccabe aged 86 retired chartered accountant and investment banker...educated in school near london.
All these techno-utopians and old school economists fail to answer one question, how can infinite exponential economic growth be compatible with a healthy, finite planet?
Whilst I agree with much of what Andrew Craig is saying, this needs to be seen in the context of rip off housing costs and inefficient government spending. New housing construction costs (materials & labour) are 25% to 33% of the sales price. Banks are lending to fund the mega profits of developers, landbankers, and financiers. Household debt has exploded to £1.85 trillion. Spending on housing costs are more than 50% of income for many people, whether on mortgages or rent. We need provide housing at cost build on land at agricultural prices. The gouging by the development industry, by landlords is simply shocking. Housing should be 10% to 12% of net income, housing is a need, we should be investing far more in pensions in UK companies, in medium term savings via ISAs. Many people don't have the spare cash to save, to invest. Then we have government spending. The inefficiency of government departments is staggering, not only for their own performance but also for the huge waste of time the public encounter when dealing with them. I believe this is down to the system of departments writing the legislation for Parliament to rubber stamp. We need to massively strip back legislation, radically reduce the overhead for government admin. The same applies to the NHS where medically headed people are expected to deliver efficient admin, with government bureaucracy thrown in. Meanwhile these people are getting paid far more than average levels of even excellent performers are in industry. It is no wonder the government has no money left over for maintenance of assets, for social care, for replacing assets, for investing in new technologies/assets. When huge amounts of capital accrue to the easy money of property development, land banking, financing, house rentals, there is no incentive for people to invest in growth companies. Then the government doesn't help by having very narrow rules over things such as EIS investments. I have seen excellent companies fail due to the restrictions on funding, where dilution is shocking, where the government does not help protect UK IP against the likes of Bayer. The stock market needs to support the growth of these small companies, but the November 2024 has even restricted investments in AIM. Instead numerous companies have been acquired by US corporations.
Back in early 90 wages were like £15K a year average worker wages in 2024 are like £25K average when inflation went up 1000% in 30 years Wages stayed almost same
Between 1998 and 2007 I could easily find a job earning £12,000 to £15,000 a year, but now finding a job earning £20,000 outside London has become almost impossible.
We're an unskilled country. Thats why our gdp per capita is down. We gave up training in favour of importing skilled workers instead and lost all the access routes for our own people to upskill.
"lost all access routes for our own people to upskill" ? That's a poor excuse. Our schools and universities didn't disappear suddenly. We gained RUclips and online learning. We are skills poor because people can't be bothered to do self development.
We are losing skilled workers, who are choosing to go abroad instead for better opportunities because we are not able to provide them here. The imported workers are kind of plugging the gap that's left behind.
@@AnonyMous-xv4ig Yes because two decades of mass migration has suppressed wages and investment in upskilling and productivity measures. This is purely the result of dependency, we have now made our own labor market less competitive and unwilling to pay the wages necessary to retain and attract highly skilled workers. The largest act of self-harm we've ever achieved.
@@OneAndOnlyMe Employers don't want trainees and most people who attend uni don't use their degrees because the jobs have been filled by immigrants. You think you're gonna get a skilled job by saying you've watched loads of youtube videos?
I enjoyed the discussion, and I agree with many of Andrew's points, but personally I'm hopeful that the UK's spell of underperformance will go into reverse before too long. As UK stocks become cheaper and cheaper, their expected returns grow larger and larger. That's bad for small companies looking to raise cash, but good for savvy long-term investors. I get the argument that momentum is driving money out of UK stocks, but now that our pension funds have reached a market-cap weighting, how much more selling will there be ? Pension funds in other countries are gradually shifting to market-cap too, it's not purely a UK phenomenon - that should lead to more inflows into the UK.
Britain's wealth tracks perfectly with the rise and decline of the north sea oil and gas. Made worse by the ban on coal and taxes on liquid fuels. Economics is thermodynamics.
The uk govt could learn a lot from how ireland was transformed by publication of our First Programme for Economic Expansion in 1960 when i was a trainee chartered accountant. For example creative use of corporate taxation by adopting a 10% corporate tax rate for manufacturing which was then promoted around the world. The uk could adopt varying rates of corporate tax such as 10% in scotland and the north of england, 20% in yorkshire and the north, 30% in the midlands and 40% in london and the south. FOREIGN investment would transfer to the UK. David Mcabe aged 86 reired chartered accountant and investment banker....glad to hear the recommendation of Ireland.
This is great. He's completely right about UK stock market and pensions schemes. Inside pensions and ISAs, as they have so many tax incentives is 100% fine some rules being set like 'at least 10% of your portfolio should be on UK stock'. Set a rule like for the next 10y we need collectively to increase the share in our portfolio on UK stocks by 2% a year. There's no solution for growth if local companies aren't funded. Bravo.
Perfect understanding of the issues and great episode. Also need to understand that the UK has been steered towards a low pay, poor quality service economy (think care homes, NHS, Delivered takeaways etc) rather than high pay high innovation driven economy. I feel UK has become more old eastern block as it was 50 years ago. Labour could decide to create a whole raft of new innovative companies with the £40B they just took from the taxpayer which in turn could be floated once successful - energy storage, micro nuclear, AI etc etc. just like all the Nationalised companies of old that were eventually privatised under Thatcher.
Attracting Islamic migrants with accommodation in luxury hotels, and give them priority for social housing. Labour gains voters as the we exponentially become an Islamic state.
LOL, nationalisation is what makes thr UK poorer in 1960s and 1970s stagflation. Lanour destroyed the UK auto industry, shipbuilding, and aviation industry. Not again
What this man says is spot on. Listen carefully because there will be no point making money sat in a hollowed out destroyed community which is actually what is happening around us and has been for years. We have fantastic science in the UK but we are largely not translating it into our own high growth companies.
Why does it matter that a company lists on the London stock exchange or New York? Unless you’re the one working in the brokerage in London. For investors in uk I can’t see it mattering or for companies it can only be a bonus.
Everyone is affected by shit performance at home, my salary is now 50% of what it was in 2000, that is despite me working in IT as a manager and developer... really... its half, not in real terms but in raw pay.... the actual number....ffks they want to pay me LESS now
I read The Adventures of Tom Sawyer and The Adventures of Huckleberry Finn by Mark Twain (whose real name was Samuel Langhorne Clemens) when I was eight, just like all my classmates in the USSR. I also understand what’s happening with the UK stock market. I know many things that no politician would ever tell you - things that directly impact the lives and well-being of people in the UK. When I moved here over 20 years ago, like many others, I naively believed that politicians and those at the top of government and business were intelligent people. However, I have come to realise that most of them couldn’t care less about the future of this country and its citizens. The UK has essentially become a vassal of the United States, not only politically but, to an even greater extent, economically. This country is being looted multiple times over in a single trade cycle! You’d probably think I was crazy if I explained here the sheer volume and the ways in which Britain’s wealth flows to the US, along with its brightest minds and latest technologies. The UK no longer deserves the “Great” in its name, and it might as well be renamed to something simple, like “Island” or “Island near Europe.”
@EvoraGT430 I bestow upon you a billion of my bitcoins as a token of gratitude. I’m ready to buy all the potatoes in capitalist countries with my bitcoins.
Labour should bring back that British ISA idea that the Tories floated - a tax-free way for people to invest in British stocks. That would be a good start, surely
Great episode, one point. The talk about investing in smaller companies so they over long term get on the bigger markets such as S&P and ftse. Should we just invest in diversified small cap index ?
@@ohnoitisnt Apologies, my communication was not clear. What I mean to say is that Energy availability drives economy, and human life itself (through natural gas based fertilizer). Energy resources are finite, and declining, or about to decline (2035 for gas), and that is why Energy is the "Elephant in the room".
11:52 and that is the reason why it was called so sudden so as to not allow there to be any proper debate on the current stat of the economy. MIC, Whitehall take your pick
What we all "feel" is not really the failings of successively bad governments, although they have contributed. What we are all really experiencing is the slow, then sudden death of a fiat currency. We are now in what seems like the late stages of the game, all G20 nations are now in a race to the bottom, who will blow up first? My money is on Japan...
my opinion is large companies in the UK are run solely for short term gain, ensure high dividends whilst paying low taxes, the city of London plays a huge part in removing wealth from the country. They are expects at removing value whenever possible. Add to the the local governments high taxes, the high property prices etc, he makes this country a hard place to get growth.
Singapore companies have boards stuffed full of PhD engineers. In the UK, we glorify 2nd rate spiv salesmen.
Ditto for UK's politicians. You don't have to show you've a track record of running a successful area or region. You just need to sleep with the right people.
PC culture.. since Blair its complete cronyism! 16:08
In the UK, all our PhD graduates are looking for jobs in investment banking or moving abroad where the opportunities in their field are. Our banking sector is a leech to any sustained growth.
Singapore also has a lightweight but effective regulatory environment. Lots of biotech is coming out of UK research, but it's almost impossible to get a business off the ground to exploit that research. Singapore is a prime destination for those researchers trying to start their own business.
If you like Singapore? Go live there. Singapore is expensive place to live. No public services. No worker rights & NO human rights record. So do you homework before thinking we should be like Singapore. What do you think the TORYS tried to do to our economy in UK over last 15yrs+. Sunak tried it. But they found out VARY quickly that we the people rely on our well funded public services. And don't won't a ruffless Singapore model
So refreshing to hear this conversation. I'm not a financial expert but you can feel the slow rot in this country. As Andrew said, how was none of this a major topic during the election?!? We're slow walking into a deeper disaster.
Government debt,along with a high number of people no longer working in the Uk 🇬🇧,whether retirees or people on benefits
No I think it has been corporate policy to asset strip the nation for much of the last 20 years, and the financial centre has been a major cheerleader.
Immigrants hold up half UK's sky. 😂
@@Zerpentsa6598Do you have a source for this claim?
it was something labour were saying and the tories did not want to engage because of their disastrous 14 years slow growth 2/3 of under new lab ) wage stagnation (longest for 200years) vastly lower investment than comparative countries (forgotten teh comparative figures but its a shocking differential ) , all the growth gone to a few 4 times the wealth for the richest 1000 people even people 3/4 of teh way up the income scale stagnant
In the US engineers are in front running the companies, and in the UK, sales managers are trying to run the companies.
You obviously haven't heard about Boeing. 😂😂😂
Or intel, Disney, tesla etc
Pretty much, product managers, project managers, program managers, all paid higher than engineers, so nobody wants to be an engineer after 25. I work in a niche IP company right now and it's insane the lack of tech knowledge from the middle upwards as products endlessly fail and the company chases the current thing trending on linkedin each year, with the loss of entire departments as the company seeks to reduce costs from a lack of sales.
@@xavi239Umm... Tesla? 🤦🏻♂️
@ yes he might be a engineer but he didn’t specialise in rocketing or cars. Most of his stuff was invented by people that he hired.
Why would I buy a smaller companies UK fund/trust?
- 0.5% stamp duty on purchase.
- 1-2% annual management fees
- 40% tax on my 3% dividend yield = 1.2%/yr in additional tax drag
- 20 years of under-performance vs the world
- High exchange spreads
- Dire UK productivity, with no relief in any projections
- Taxes on UK businesses rising.
Alternatively i can go buy a big global ETF with zero transaction and holding cost and only a 0.1% management fee and much higher tax efficiency via lower dividends.
Not hard to see why UK stock investment is dead.
And the chancellor has the sheer gall to go and tax share gains even further
I’ve been saying this for decades! We need major tax relief of 30-40% if we were to hold a uk based index fund for a minimum of 10 years. This mitigates the risk of low returns and underperformances!
I think the only way to address this is slowly and by leaning on the UK underweight. Do this by waiting for the small UK tigers to breach the ETF trading barrier. Some something like a 50/50 US/UK ETF index fund with low fees and tax wrappers (SIPP/ISA).
@@Abdul_Rahman86
Increasing CGT further but discounting gains wrt inflation, and scrapping stamp duty would go a long way to help.
Napkin math suggests the government takes more off you after 20 years with the current 24% CGT rate than at a 40% rate where gains are indexed (assuming a 8% annual total return and 3% inflation).
The indexed version is better as soon as you hold stocks for ~2 years or more
Inheritence tax is the same. We're effectively taxing inflationary (imaginary) 'gains' on real assets (homes). A home today is still worth one home in 30 years, it's wages and labour that are losing value. Homes are not gaining value, you just have to look at inflation adjusted median home values over the last 15 years to see this
The stamp duty tax on share purchases is utterly ridiculous
You're literally just typing out his point. His point is, we need to change as a country we're setup for only the super wealthy to be able to operate with all the regulation/taxes/etc.. and we should all be taking our economy more seriously and get educated on it then invest in it... His point isn't "invest in failure". or even worse Gary S options.
BBC used to be my channel of choice for information but it has been so dumbed down I cannot bear to watch it and BBC Radio 4 has also been dumbed down.
Well done for arranging this interview.
BBC Radio 4 is a feminist mouthpiece, you're not going to get any sense talked on there.
Dumb and liar.
Agree. TV is a begging box to keep you happy and the news is full of non news stories.... Sadly it starts at the bottom, We've dumbed down education........ and lost our patriotism
Not dumbed down, they are hyper ideological! It's a propaganda outfit!
Legacy media is dead...
Great interview, this should be forwarded to every UK politician on any side.
They won't comprehend it.
And you’d just get…. “Interesting we ll definitely look into it some time”
15:01 Almost $1trillion in profits is syphoned out of the UK to foriegn companies mainly Wall Street every year increasing year after year. This is about 30% of the UK GDP.
ARM Holdings: world-class semiconductor company based in Cambridge, yet now owned by Japanese Softbank. A national scandal. I hold some UK stocks, but 75% of my portfolio is in the US. Brexit was the final straw for me. Your man's bang on: we can't be honest with ourselves (or even be bothered to put the effort into having the awareness) that there's a serious problem with our economy and the knock-on consequences that has for our society.
Not just ARM Holdings, but also ASDA, Boots, Cadburys, The AA, LV Insurance, P&O, etc. They were, for the most part, profitable, but the pensions and large corporate holdings wanted a quick buck rather than long term income for pensions.
Successive governments of all leanings have failed to protect British brands, and jobs, from corporate raiders.
our politicians are not economists , they have not had real jobs or run a business! WEF and WHO have them in total control, they have systematically destroyed the Western economies on purpose…. The Trudgen Horse is in out Government.
The government needs to incentivise us to invest into UK equities.
Tax relief of 35% if we agree to hold uk equities for a minimum of 10 years in a SIPP
Exactly right, we are hollowing out our own society and wondering why we are in a mess. All the structural stats ( the real dashboard in front of us as we drive the economy along) are screaming poor performance for decades - lousy growth, poor r&d, poor productivity, poor infrastructure, lack of investment, low nos of robots/automation, poor translation of science to spin-outs, poor domestic high growth med co's, weak innovation management skills etc etc etc. And then our politicians wonder why there is a problem!!! It's never discussed in elections despite it all staring us full on in the face.
ARM Holdings are no longer owned by Softbank and is publically quoted not on the London SE but on New York Stock Exchange. You cannot invest in them through a UK Stocks & Shares ISA though, so more difficult to invest in as a UK citizen in high tech...
I agree that it's an absolute national disgrace that the UK has been run for rentiers and not entrepreneurs. The political class has a huge responsibility for this, both Labour and Conservative, but mainly the latter because they're "supposed" to know better, but the last 14 years put the lie to that idea. And now the Tories are being led by the most incompetent business secretary of the past 5 decades! God help Britain.
Fantastic interview, the most honest assessment I believe I've heard in years.
I will be heading out to buy the book as soon as I can.
Thank you as always guy's for another brilliant podcast. I subscribe to around 10 financial educational channels such as yourselves, and I've seen Andrew Craig on a few of them, and course on his own channel. This guy is an extremely important man, someone whom I believe to be a true trailblazer. Andrew Craig, and people like him, NEED to give every tool possible to try and fix some many of our country's financial problems.
This podcast just gets better and better
Find yourself a woman that loves you as much as this man loves the UK stock market
My husband did. :-) We're very happy.
@@SevenEllen you'll end up leaving him, like most women.
@@pondeify nice to see how bitter you are. I'm sure you'll stay that way.
@@andrewharris3900why are you so close minded
@@pondeify Yes, after taking his stock market gains
The Irish GDP per capita is not what it appears to be...... being a tax haven for Apple and Microsoft does not translate to a better life for the people.
Spot on. There are 2 areas that have benefited in the last 30-40 years and that is entry level pay and CEO pay (and by extension the rest of the C suite). This has come from the middle level pay. I researched from the time when I started work with my pay rate and compared it to current minimum wage. Now entry level pay is 5x what mine was in 88 but mid level pay has only risen 2.7x. CEO wages are off the chart ridicules. Now you have CEOs paid millions but they do not produce 50 to 60x profit per person than their mid level staff do. From first principles you only spend money in a business when it either reduces cost or makes money. So the claim CEOs need that remuneration is false because they don’t create the additional income it savings themselves. The cult of the CEO needs ending and start paying them sensible salaries and paying that saved money into the business and the mid level.
Won’t happen but it should.
average Irish salary is higher than UK average so seems to be going ok
Over 300k people employed in MNCs in Ireland, over 10% of the entire workforce
These multinationals are far more than just a PO Box for tax purposes.
I heard the Irish finance minister discuss what they were spending on and what money was being kept back for a rainy day. Sounds like better v UK where spending gets cut and deficits run up.
The point is the GDP per head figure for Ireland needs to be adjusted. It's ridiculous the author doesn't know this.
He didn’t talk about private equity. Most smaller tech firms in the UK are owned by private equity firms, basically off market and not accessible to the average joe. Not sure how much pension funds are invested in private equity.
Most of UK pensions aren't big enough to invest in PE
Yeah - I worked for Jewson the builders merchants and they got taken over by private equity - the same lot that gutted and then sunk Debenhams. They then cut cut cut and god knows what’s left
Great discussion this - we need more Andrew Craig type speaking and influencing
It’s so refreshing to listen to another intelligent conversation regarding finances & shares etc. This one in particular has kept me glued all the way through. Perhaps I should diversify my portfolio..
The reason most people are not interested in investing is that they haven't got the money or time and governments are generally quite happy to keep us like mushrooms in the dark fed on rubbish. Gambling is also more attractive.
Education, education, education
Investing for the average Joe is essentially gambling as no average Joe has the capability to perform due diligence in a rigged market. Yes, markets are rigged.
I love Andy and his insight. I am reading his ‘Own the world’ book and I’m now following plain english finance.
Love this guy
We've also lost:
1. DeepMind to Google.
2. RareWare (Goldeneye, Perfect Dark, Killer Instinct, Battle toads, Donkey Kong Country) to Microsoft.
3. DMA Design (Grand Theft Auto) to Rockstar.
4. SI Games (Football Manager) to Eidos and then SEGA.
I said this the other day, most people couldn't name 10 tech startups in the UK... People are wondering why we're poorer, and think it's the 'super riches' fault. No it's our government anti-business policies and regualtion that has destroyed it. We don't create anything, we're just running a ponzi scheme on people.
Don't it gets me so angry... people blame the 'super rich' and it's not even their fault. Our governement has made it almost impossible to operate with the regulation and taxes... espiecally if you're small and trying to grow.
We lose all our skilled workers, we lose the good tech companies... we've been running some ponzi scheme instead with ever increasing numbers to make up for it. Yet some guy that owns assets is considered the problem, blame your government not them.
*I'm glad you made this video* it reminds me of my transformation from a nobody to good home, $34k monthly and a good daughter full of love..
My advice to everyone is that saving is great but investment is the key to be successful imagine investing $15,000 and received $472,700.
Hello, I'm a Doctor from Scotland, how do you make such amount? I'm a born
Christian but sometimes I feel so down of myself because of low finance but I still believe in God.
Making touch with financial advisors like *Janice Isaac Owen* who can assist you restructure your portfolio, would be a very creative option. Personal financial management will be crucial to navigating the next difficult times.
Unfortunately, not all of us were financially literate early. I was 35 when I finally educated myself and started taking steps. I went from $176,000 in debt with zero savings or retirement to now, 2 years later, fully debt-free and over $1000,000 net worth. I know that doesn't SOUND like a lot, but I'm incredibly proud of it. Now I'm fast-tracking my wealth building (investing $400,000 annually) and don't owe a dime to anyone. It's a good feeling!
You are absolutely right, we also have lot's of expert, real ones with certificate and firms IDS out there waiting for investors to invest and experience the best of trade.
Our country doesn't even allow the prenatal polygenic screening of embryos during IVF treatment. Britain will miss the Bio-Tech revolution, just like it missed the Tech revolution.
Guaranteed.
Yeah, poor regulations made by stpd politicians
When it takes weeks for the scan results of a cancer patient to be given to his doctors, you know it's hopeless. Of course, he could have gone private and got his scan within hours. Just like in NHS dental "care". Anyway, he died before he got his results.
Andrew Craig is passionate and a brilliant advercate for change I just hhope the UK is saveable ?
No its long dead and not coming back
Uk pensions primarilly invest into Treasuries and that is why our oensions have not performed over last 10 plus years. Inaddtion, British schools don't even teach kids, teenagers in particular, how to manage your monthly income and running your own home financially. Shocking.
I used to be a supply teacher but I no longer do it as agencies are still paying the 2008 rate so its not worth doing anymore. They have slightly raised teaching assistant rate to match minimum wage but the teaching rate is stagnant. I told my last agency to buy a calendar. In the media they talk about mainstream teachers not being paid enough but there's total silence on the rates of pay for agency work, not just teachers. I often get enquiry emails offering me work but I just block them now. All that work as a teacher and all that investment in qualifications is not worth a penny. 2 of my 3 kids have a degree but I have told my last one to not bother as it is now a total rip off - especially with the prices going up - and a waste of time as many employers aren't bothered about it anymore. I'm 57 and still paying student loans, its all a sick joke on people!!!
They won't even pay for your CRB checks.
Interesting interview, but there are many reasons besides stock market investment that restrict U.K. growth compared to US. Look at VC funding, regulation, costs (energy, commercial property, business rates).
Andrew Craig is easily my favourite of all your guests. Such interesting insights offered. Please continue to have him on every few months.
I feel like I've just had a private screening to something really significant. Such an insightful episode. Thank you.
what? forced asset allocation? pick-up a history book and look at failed communist countries.
The Irish Government provide GNI figures instead of GDP . The reason is they are factual and not distorted. They still look better than anything in the UK.
Faaaaaaacts 👍 😊
13:37 "A much better policy" is one way to put it. The reality is that Ireland has one of the lowest corporate tax rates in Europe and a relatively small population (around 5 million), making it an attractive location for large corporations to establish their headquarters. With the UK’s significantly larger population, it can’t compete on corporate tax in the same way.
Don't have to be the same. Just lower it so people can grow and not feel punished by the tax.
They have better fishing rivers as well. The island should be reunited.
@@saltymonke3682 That won't stop large corporations selecting the country with the lowest corporation tax.
I know it was completely daft. Sounds like Truss modelling Britain on the Singapore economy. Where did that end ...
Night and day compared to the chap a few weeks ago peddling stock picking over index. Much more compelling as to why we need to refocus capital for the greater good as well as personal returns.
Thank you for promoting CRH an Irish company one of our clients in the 1960s through to 1980s. David McCabe Dubliin director Investment Bank of Ireland
Nobody is buying UK Equity because of its performance. I wasted 10years invested in UK market, and have jumped ship to S&P500.
That’s why it’s under performed! Because investment has been directed elsewhere
@@therangemen8627 It’s a lame duck. If you think it’s value, buy now while it’s low.
@@wl660
You seem to have completely missed the point.
@@wl660only if you think there is a solution on it's way
@@therangemen8627 or could it be that british companies suck?
I look forward to a “making money podcast” more eagerly than looking forward to my dad walking through the front door after he left to buy milk 15 years ago. Also you brought back the man himself Andrew Craig!!!!!! I could listen to this podcast for hours and hours!!!! Now I would recommend invest in UK banks. Especially banks that look after small businesses, Lloyds, NatWest, HSBC, etc
Titus Oates Polar VC I'm just going out I maybe sometime
😂
Was the shop busy?
@@scott8057 The way it reads Abdul's dad is Andrew Craig go figure !
@@hachimaru295😂😂😂😂😂
Well said. So much insight in this podcast.
I’ve been saying this very same thing for years and years - I’ve worked in the tech industry for over 30 years and certainly in the early to mid 90s worked for a few startups. I’ve know about this problem certainly from the perspective of the industry that I work in where some really good companies have struggled to raise investment. Two of the startups I worked for were bought in their entirety by US firms.
Not sure why people can’t except that the Uk is an industrial dinosaur. No way the top old firms of the ftse will let the government fund tech firms to take over. Not going to happen whilst there are minerals in the ground.
Brilliant episode. Biotechnology has been the future for decades, but the underpinning technological advances are staggering and I agree (disclaimer, as someone who works in the sector) that the UK is incredibly well placed given its R&D base. It is hard to predict the future especially as biotech and AI are now aligning. The US market (and the large market caps that make up the indices) is terrifyingly expensive, so personally (as both an optimist and contrarian) I do feel that investing in the UK gives great diversification, and if biotech achieves a fraction of its potential there will be benefits for investing in the UK (and its stock exchange too).
R&D in the UK is mostly derivative today. There are some good medical research projects, but not many. Few years ago they made a lot of noise over graphene and even opened a graphene research unit. But little has come out.
Ireland’s GDP doesn’t necessarily help the Irish as it’s mainly a tax fiddle
Still helps the Irish. AstraZeneca wanted to build a new factory in the UK, they ended up building it in ROI because the UK Government tithe is far too high .
yep. Was surprised he went there, everyone knowledgable online knows Irelands GDP figure is a mess
You can't mention fiddle and Ireland without mentioning pub 🍻 too
the irish are still poor despite their GDP
@@littlerollingwheels average UK wage is £34k, average Irish wage £38k (45keuro) so incorrect in your comment.
Really great guest, and really engaging interview.
Im only 10 minutes in but I can already tell this might be the best thing I watch all week
Hope it lived up to your expectations!
This was Top and I mean TOP vid, awesome work guys. 🎉🎉🎉🎉
Good points, would love to see Andrew Craig in conversation with Gary Stevenson.
If I was forced to invest in UK stocks via my pension to bolster these stock failings I'd close my pension.
If this happens it's definitely going to more stick than carrot... They could give extra tax relief or exemptions on CGT but they would never do that
Rofl
No you wouldn't IF it was tax positive..
@@Rockall57ha ha
Something not mentioned is that the increases in house prices in the uk have encouraged buy to let investing rather than investing in the stock market. Also the investors that do invest in the uk have a property mindset with an obsession with dividend yield over growth and reinvestment.
BTL is much more aggressive in the USA. 30 year fixed rate mortgages and depreciation for accounting to zero in 25 years. 1034 exchange to deferred CGT.
So by logic people would flock to the USA based on the greed for more profit
Most people in the uk cannot buy a house there, so the fixed rate mortgages and CGT rules are irrelevant to 95% of UK Persons. In contrast, in the uk they have a choice of equity or housing.
In the UK house prices rises have exceeded the returns of the Ftse 100 since 2000, whereas in the US the S & p 500 has done better relative to the property market. This means that people looking back and seeing returns over the last 25 year period would not unreasonably be more likely to favour housing compared to the stock market in the uk than the us.
@@andrewhunt9078 it's very easy to make predictions with hind sight. Everyone knows what last week's lottery numbers were Diversity and plan B's are required when making and investment decision.
Also, look at real house price adjusted for inflation in the UK. It poor returns. The magic is in the leverage and debt.
Correct the UK is full of people chasing rent instead of actual productivity or value add...
@@andrewhunt9078 Everyone in the UK can easily buy into the S&P 500, I will never understand why someone would buy UK based stocks, they're under performers to put it lightly
Great discussion ❤
When we were trying to get investment for inventions that my husband had patented, Angel Investors wouldn’t consider looking at you unless in your business plan you could state who you would be selling your company to in 5 years, this is the reality of trying to get started in the U.K.
Spatting knowledge. Thank you.
Just because you can do a thing doesn’t mean that thing is scalable. Computers running on brain cells already exist, but scaling that to that technology being in your phone is a big leap and often never happens.
I will agree we are really bad at turning all the wonderful discoveries coming out of our universities into manufactured products
I love listening to Andrew Craig. Good to see him back on this.
Thanks so much!
The UK is underperforming for a number of reasons, and one of the biggest is excessive regulation, which wastes a lot of my time. Much of this bureaucracy comes from both central and local governments. They create policies without understanding the real-world impact on people, leaving it harder to get anything done. They need to repeal ever law introduce to back to the 1980s and then start again. A lawyer told me, that a lot of laws an regulation introduced after the Tony Blair's government. Laws drafted baldly, great for lawyers, who are the middleman earning huge hourly rate on advising clients.
A recent experience with the Courts highlighted this for me. I spent 60 minutes on hold, unable to focus on other work because I needed to stay alert for when someone finally picked up. Bureaucracy has made it nearly impossible to speak to a real person anymore; everything is pushed online. That’s fine if your situation fits into the predefined boxes, but if it doesn’t, you’re left without options.
If the government taxed bureaucracy, maybe we’d see less of it, and the country might actually be more productive. There are more people working from home now, but I’m not seeing any increase in output as a result.
Thought provoking stuff Damo. A great guest and the time flew by listening to what he said 👍🏻
Interesting but the claims about Ireland GDP figures detract from credibility and I’m amazed went unchallenged. Irelands GDP is hugely inflated because of its corporate tax policy and even the Irish Government caution about this. The figure often quoted in ireland is GNI.
Well said
Yes, but even with a leprechaun economy, it's still good besides the housing crisis
@ it doesn’t have a ‘leprechaun’ economy; it actually has a pretty strong economy, my comment was about Ireland’s GDP data.
@ritalally7018 it's a leprechaun economy, even the former Irish Central Bank governor said that.
Just when I thought couldn’t be more depressed living in this country…😢
Get your Irish Citizenship and you can work anywhere in the European Union
@@senholto419The EU is dying faster than the UK.
I wanted to start a business in the UK, First of course the banks merely told me that I couldnt make anything in the UK, no one does. Then tried to use an investor "angel" and all they did was run us around for 18 months adding management overhead. The amount of money available as start up funding is near zero, the interest rates are sky high, the timescales to pay it back tiny. Then go to Germany, and well, you can borrow, the government will give you money to start, will pay you to live while you get started... no, you cant start anything here any more. The country is totally fucked by those in charge
Just look at how entrepreneurs get treated. Dyson created a company worth £20bn, forced out the UK because of taxation.
He also stupidly advocated for Brexit
@ggriffin325 do you want to pay CAP budget every year? If you think UK stock market is bad, you haven't take a look at EU stock markets. France is now poorer than uk
@@saltymonke3682France had Macron. He would have ruined any country.
Dyson is another worthless exploiter of the British economy. Our corporation tax is literally the lowest of the G8. How these people have the gall to open their daft mouths is a feat in itself. And don't get me started on advocating Brexit before p*ssing off to Malaysia. Time to start stripping knighthoods
Dyson was a crafty guy and very disloyal to UK. Spouted Brexit to increase his market base whilst planting himself in Asia where he saw the future for his business.
What was said about the main drivers for why pensions moved more heavily towards bonds as default? Undertsand bonds and their place in portfolios but can't find why pension fund managers made the transition as he suggested
I've heard that there was a regulatory change that caused the change towards bonds from shares, but I want to hear details of what happened, when and why.
@@zzzzoijzzzzz I’m copying my old comment from a video by the FT called ‘how to reboot Britain’s capital markets’ which I recommend you watch.
This is a bit of a long comment but there’s some nuance which I think is important. Our (London) stock market is what is widely perceived to be a dinosaur equity market that’s overly reliant on old economy sectors such as oil and banks which leads to my next point.
On lack of exciting companies listing - we're risk-averse as a country, and the doesn't bode well for startups specialising in things like AI (the new hot topic) and quantum computing, whose large capital expenditures require years of patience. A key accelerant in the move of some listings to the US is a lack of liquidity in the UK, understandably so, if UK plc's can fetch higher valuations and a larger investor base whilst US listing rules aren’t extremely tight, why wouldn't they move? An example of this was Arm Holdings choosing Nasdaq over the LSE in 2023, this isn’t to say that breaking into the US will be easy, even though Arm have been successful in doing so.
I remember reading a report on Bloomberg talking about how the UK VC's can keep up with Bay Area VC's in terms of funding for tech ventures. Funding for startups (companies valued at no more than $15m - 91% funded, $4.1bn for UK vs $4.5bn), but the moment UK companies reach scaleup status (valuations of $15m-100m), we raise $7.1bn vs $13.9bn for Bay Area which is 51%, and it gets even harder when tech companies in the UK reach breakout status (>$100m valuation) as we raise $7.8bn vs $35.2bn in the Bay Area which is 22% of funds raised in comparison to SF.
Also, in the early 2000s, the UK government introduced new rules forcing retirement fund managers to be more open about their investments and about how they planned to meet future pension obligations. One result was a shift out of riskier equities - the pension industry’s preferred investment until that point - and into safer government bonds. The trend was reinforced over the following decade as millions of workers holding so-called defined-benefit pension plans retired. Pension managers doubled down on government debt at the expense of shares so they could better match their long-term liabilities to those retirees. What’s more, what little equity allocation the funds retained was put increasingly into stocks in other markets as they tried to diversify their holdings. UK pension funds held 1.6% of UK-listed stocks in 2022, down from about 32% in 1992, according to data from the Office for National Statistics.
Edit: thanks to depressed valuations, London’s allure as a center for IPO activity has been diluted by a glut of alternative funding from private equity. That’s been compounded by some woeful stock performances in the wake of high-profile listings, including Deliveroo Plc, Dr Martens Plc and Ithaca Energy Plc. Meanwhile, headlines around companies leaving London for other exchanges have hurt the City’s image as a place to do IPOs. I've heard Shein want to IPO in London for around $64bn, but imo I don't think it'll revive London's capital markets the way people think it would, the company has controversial ethical + sustainability practices, as well as possible IP theft and moreover, they chose London as they couldn't file for an IPO because of hurdles to the listing in the US which is tied to the earlier point about their shady practices. We're basically 2nd choice if firms applications for US based IPO's (NYSE or Nasdaq) get rejected.
@@zzzzoijzzzzz I've commented this before on the FT's video about fixing Britain's capital markets. It is a long comment but there’s some nuance which I think is important. Our (London) stock market is what is widely perceived to be a dinosaur equity market that’s overly reliant on old economy sectors such as oil and banks which leads to my next point.
On lack of exciting companies listing - we're risk-averse as a country, and the doesn't bode well for startups specialising in things like AI (the new hot topic) and quantum computing, whose large capital expenditures require years of patience. A key accelerant in the move of some listings to the US is a lack of liquidity in the UK, understandably so, if UK plc's can fetch higher valuations and a larger investor base whilst US listing rules aren’t extremely tight, why wouldn't they move? An example of this was Arm Holdings choosing Nasdaq over the LSE in 2023, this isn’t to say that breaking into the US will be easy, even though Arm have been successful in doing so.
I remember reading a report on Bloomberg talking about how the UK tech struggle to keep up with Bay Area/Silicon Valley tech in terms of funding. Funding for startups (companies valued at no more than $15m - 91% funded, $4.1bn for UK vs $4.5bn), but the moment UK companies reach scaleup status (valuations of $15m-100m), we raise $7.1bn vs $13.9bn for Bay Area which is 51%, and it gets even harder when tech companies in the UK reach breakout status (>$100m valuation) as we raise $7.8bn vs $35.2bn in the Bay Area which is 22% of funds raised in comparison to SV.
Also, in the early 2000s, the UK government introduced new rules forcing retirement fund managers to be more open about their investments and about how they planned to meet future pension obligations. One result was a shift out of riskier equities - the pension industry’s preferred investment until that point - and into safer government bonds. The trend was reinforced over the following decade as millions of workers holding so-called defined-benefit pension plans retired. Pension managers doubled down on government debt at the expense of shares so they could better match their long-term liabilities to those retirees. What’s more, what little equity allocation the funds retained was put increasingly into stocks in other markets as they tried to diversify their holdings. UK pension funds held 1.6% of UK-listed stocks in 2022, down from about 32% in 1992, according to data from the Office for National Statistics.
Edit: thanks to depressed valuations, London’s allure as a center for IPO activity has been diluted by a glut of alternative funding from private equity. That’s been compounded by some woeful stock performances in the wake of high-profile listings, including Deliveroo Plc, Dr Martens Plc and Ithaca Energy Plc. Meanwhile, headlines around companies leaving London for other exchanges have hurt the City’s image as a place to do IPOs. I've heard Shein want to IPO in London for around $64bn, but imo I don't think it'll revive London's capital markets the way people think it would, the company has controversial ethical + sustainability practices, as well as possible IP theft and moreover, they chose London as they couldn't file for an IPO because of hurdles to the listing in the US which is tied to the earlier point about their shady practices. We're basically 2nd choice if firms applications for US based IPO's (NYSE or Nasdaq) get rejected.
Totally agree that nobody is interested in finance, even serious geopolitical experts have no clue about the elephant in the room. It is so refreshing to listen to someone who knows what they are talking about, not the media's economics editors.
Maybe one of the problems we have is that we don’t give employees equity as part of comp in the same way the Americans do? If employees have more of a stake it might encourage entrepreneurs ship at all levels of a company?
Because your employee will have to pay more tax in stock option than in salary.
Fascinating and compelling info about biotech
There’s a difference between where a public company is listed and the markets in which it operates. Also we’ve had ultra low interest rates the last decade so British companies have had easy access to capital other than raising equity.
I was looking at ex-UK index funds recently, and now that I've seen this episode I've changed my mind. Amazing work, guys.
In the 1980s i attended a 8 week course at a well known UK managment college. I was very disappointed at the business expertise of many of my 60 colleagues so I am not at all surprised at the steady downturn in the uk economy. Look at Ireland since 1960 when we published our first programme for economic expansion. David mccabe aged 86 retired chartered accountant and investment banker...educated in school near london.
All these techno-utopians and old school economists fail to answer one question, how can infinite exponential economic growth be compatible with a healthy, finite planet?
Whilst I agree with much of what Andrew Craig is saying, this needs to be seen in the context of rip off housing costs and inefficient government spending. New housing construction costs (materials & labour) are 25% to 33% of the sales price. Banks are lending to fund the mega profits of developers, landbankers, and financiers. Household debt has exploded to £1.85 trillion. Spending on housing costs are more than 50% of income for many people, whether on mortgages or rent. We need provide housing at cost build on land at agricultural prices. The gouging by the development industry, by landlords is simply shocking. Housing should be 10% to 12% of net income, housing is a need, we should be investing far more in pensions in UK companies, in medium term savings via ISAs. Many people don't have the spare cash to save, to invest.
Then we have government spending. The inefficiency of government departments is staggering, not only for their own performance but also for the huge waste of time the public encounter when dealing with them. I believe this is down to the system of departments writing the legislation for Parliament to rubber stamp. We need to massively strip back legislation, radically reduce the overhead for government admin. The same applies to the NHS where medically headed people are expected to deliver efficient admin, with government bureaucracy thrown in. Meanwhile these people are getting paid far more than average levels of even excellent performers are in industry. It is no wonder the government has no money left over for maintenance of assets, for social care, for replacing assets, for investing in new technologies/assets.
When huge amounts of capital accrue to the easy money of property development, land banking, financing, house rentals, there is no incentive for people to invest in growth companies. Then the government doesn't help by having very narrow rules over things such as EIS investments. I have seen excellent companies fail due to the restrictions on funding, where dilution is shocking, where the government does not help protect UK IP against the likes of Bayer. The stock market needs to support the growth of these small companies, but the November 2024 has even restricted investments in AIM. Instead numerous companies have been acquired by US corporations.
Now we have Labour hitting UK businesses with £25Billion of NI tax.
Vote reform uk
@@saltymonke3682Workers Party is better.
Great interview, lots of common sense.
17:13 not if you are a bank owner. for a bank bonds are where their money is
Back in early 90 wages were like £15K a year average worker wages in 2024 are like £25K average when inflation went up 1000% in 30 years
Wages stayed almost same
Between 1998 and 2007 I could easily find a job earning £12,000 to £15,000 a year, but now finding a job earning £20,000 outside London has become almost impossible.
91.5% inflation since 1990. According to ONS.
@@maxbig9021 minimum wage for 37.5hr week would be over £22k
@@alfredlear41411000% in the housing market though
We're an unskilled country. Thats why our gdp per capita is down. We gave up training in favour of importing skilled workers instead and lost all the access routes for our own people to upskill.
skilled or unskilled most trades don't pay in the UK, better to buy , sell, and deal!
"lost all access routes for our own people to upskill" ?
That's a poor excuse. Our schools and universities didn't disappear suddenly. We gained RUclips and online learning. We are skills poor because people can't be bothered to do self development.
We are losing skilled workers, who are choosing to go abroad instead for better opportunities because we are not able to provide them here. The imported workers are kind of plugging the gap that's left behind.
@@AnonyMous-xv4ig Yes because two decades of mass migration has suppressed wages and investment in upskilling and productivity measures. This is purely the result of dependency, we have now made our own labor market less competitive and unwilling to pay the wages necessary to retain and attract highly skilled workers. The largest act of self-harm we've ever achieved.
@@OneAndOnlyMe Employers don't want trainees and most people who attend uni don't use their degrees because the jobs have been filled by immigrants. You think you're gonna get a skilled job by saying you've watched loads of youtube videos?
I am watching this Advert Free, this content is completely free,
Love this dude
Great podcast.
I enjoyed the discussion, and I agree with many of Andrew's points, but personally I'm hopeful that the UK's spell of underperformance will go into reverse before too long. As UK stocks become cheaper and cheaper, their expected returns grow larger and larger. That's bad for small companies looking to raise cash, but good for savvy long-term investors. I get the argument that momentum is driving money out of UK stocks, but now that our pension funds have reached a market-cap weighting, how much more selling will there be ? Pension funds in other countries are gradually shifting to market-cap too, it's not purely a UK phenomenon - that should lead to more inflows into the UK.
Brilliant insight
You cannot even buy ARM shares inside an ISA for some reason. I tried shortly after the IPO and you still cant.
ARM is Nasdaq listed. UK S&S ISA only allow you to invest in UK listed stocks afaik. Willing to be corrected if what I said is false.
@ how did i buy Tesla shares then?
@@ynwa5xinistanbul idk, maybe through a brokerage app like Trading 212 or something
Britain's wealth tracks perfectly with the rise and decline of the north sea oil and gas. Made worse by the ban on coal and taxes on liquid fuels. Economics is thermodynamics.
Love this
The uk govt could learn a lot from how ireland was transformed by publication of our First Programme for Economic Expansion in 1960 when i was a trainee chartered accountant. For example creative use of corporate taxation by adopting a 10% corporate tax rate for manufacturing which was then promoted around the world. The uk could adopt varying rates of corporate tax such as 10% in scotland and the north of england, 20% in yorkshire and the north, 30% in the midlands and 40% in london and the south. FOREIGN investment would transfer to the UK. David Mcabe aged 86 reired chartered accountant and investment banker....glad to hear the recommendation of Ireland.
This is great. He's completely right about UK stock market and pensions schemes. Inside pensions and ISAs, as they have so many tax incentives is 100% fine some rules being set like 'at least 10% of your portfolio should be on UK stock'. Set a rule like for the next 10y we need collectively to increase the share in our portfolio on UK stocks by 2% a year. There's no solution for growth if local companies aren't funded. Bravo.
Perfect understanding of the issues and great episode. Also need to understand that the UK has been steered towards a low pay, poor quality service economy (think care homes, NHS, Delivered takeaways etc) rather than high pay high innovation driven economy. I feel UK has become more old eastern block as it was 50 years ago. Labour could decide to create a whole raft of new innovative companies with the £40B they just took from the taxpayer which in turn could be floated once successful - energy storage, micro nuclear, AI etc etc. just like all the Nationalised companies of old that were eventually privatised under Thatcher.
Attracting Islamic migrants with accommodation in luxury hotels, and give them priority for social housing. Labour gains voters as the we exponentially become an Islamic state.
another one... trying to blame poor....
@@george6977 Labour have only be in charge for a few weeks. The Conservative party are to blame for idiotic immigration policies.
@@zzzzoijzzzzzAll began under last labour gov continued by tories
LOL, nationalisation is what makes thr UK poorer in 1960s and 1970s stagflation. Lanour destroyed the UK auto industry, shipbuilding, and aviation industry. Not again
It was only today I listened to my pension company saying how they were investing in other markets and reducing UK equity, mint
What this man says is spot on. Listen carefully because there will be no point making money sat in a hollowed out destroyed community which is actually what is happening around us and has been for years. We have fantastic science in the UK but we are largely not translating it into our own high growth companies.
High growth companies require the largest market close to home which they don't have access to now thanks to brexit
@@Charlies247 brexit was a huge mistake, you can't lock yourself out of the most desirable market and expect wealth creation.
Why does it matter that a company lists on the London stock exchange or New York? Unless you’re the one working in the brokerage in London. For investors in uk I can’t see it mattering or for companies it can only be a bonus.
Adds value to that countrys stock market. Also easier to buy and sell stocks
@ it’s pretty easy to buy from US exchanges and does it matter if the company still hires and operates in the UK if they are listed on the NYSE ?
Everyone is affected by shit performance at home, my salary is now 50% of what it was in 2000, that is despite me working in IT as a manager and developer... really... its half, not in real terms but in raw pay.... the actual number....ffks they want to pay me LESS now
I agree 100%
That said I enjoyed this.
I read The Adventures of Tom Sawyer and The Adventures of Huckleberry Finn by Mark Twain (whose real name was Samuel Langhorne Clemens) when I was eight, just like all my classmates in the USSR. I also understand what’s happening with the UK stock market. I know many things that no politician would ever tell you - things that directly impact the lives and well-being of people in the UK.
When I moved here over 20 years ago, like many others, I naively believed that politicians and those at the top of government and business were intelligent people. However, I have come to realise that most of them couldn’t care less about the future of this country and its citizens.
The UK has essentially become a vassal of the United States, not only politically but, to an even greater extent, economically. This country is being looted multiple times over in a single trade cycle! You’d probably think I was crazy if I explained here the sheer volume and the ways in which Britain’s wealth flows to the US, along with its brightest minds and latest technologies. The UK no longer deserves the “Great” in its name, and it might as well be renamed to something simple, like “Island” or “Island near Europe.”
1 potato for you comrade.
@EvoraGT430 I bestow upon you a billion of my bitcoins as a token of gratitude. I’m ready to buy all the potatoes in capitalist countries with my bitcoins.
Yes! One of my favourite finance content creators is back 😁 Well done guys!
Brilliant
Get this man running the country
Labour should bring back that British ISA idea that the Tories floated - a tax-free way for people to invest in British stocks. That would be a good start, surely
THANK YOU FOR BRINGING ANDY AGAIN !!!, THANK YOU LADS!!!
Guys, guys, guys, we have an "economist" as chancellor of the Exchequer 😂
Great episode, one point. The talk about investing in smaller companies so they over long term get on the bigger markets such as S&P and ftse. Should we just invest in diversified small cap index ?
Energy is the Elephant in the room.
My rent bill is 10x my energy bill
@@ohnoitisnt Apologies, my communication was not clear. What I mean to say is that Energy availability drives economy, and human life itself (through natural gas based fertilizer). Energy resources are finite, and declining, or about to decline (2035 for gas), and that is why Energy is the "Elephant in the room".
Not global warming?
We need water, sustainable agriculture, and sustainable energy.
@@uniteddreamer Yes, and sustainable construction. Easy to say, but hard to do, as it will need to use a lot less energy.
I was just about to start up a company creating stump grinders and wood chippers, this government gave me the chills. All is now on hold.
11:52 and that is the reason why it was called so sudden so as to not allow there to be any proper debate on the current stat of the economy. MIC, Whitehall take your pick
What we all "feel" is not really the failings of successively bad governments, although they have contributed. What we are all really experiencing is the slow, then sudden death of a fiat currency. We are now in what seems like the late stages of the game, all G20 nations are now in a race to the bottom, who will blow up first? My money is on Japan...
Wow and Japan have just thrown 140billion into their 'exonomy'😊
@deborahswan221 that's nothing Japan has printed over half a quadrillion so far...
I used to invest in AIM but got burnt so many times that I no longer touch that market
my opinion is large companies in the UK are run solely for short term gain, ensure high dividends whilst paying low taxes, the city of London plays a huge part in removing wealth from the country. They are expects at removing value whenever possible. Add to the the local governments high taxes, the high property prices etc, he makes this country a hard place to get growth.
Omg that guy literally has a T-shirt that says ‘finance bro’! What an absolute cloche-end!