Sorry, Chancellor, Sid has moved on from shares
Jonathan Prynn @JonPrynn
JEREMY HUNT had fun in his Autumn Statement speech with the possible return of Sid to the financial stage when the rest of the Government’s holding in NatWest is sold back to the public through a retail offer.
But Sid must be getting on a bit now — the original British Gas marketing campaign that spawned the mythical private investor dates back to 1986.
And unfortunately, there are few signs that dear old Sid’s children and grandchildren have in any way inherited his enthusiasm for direct investment in quoted company shares.
New figures from the Office for National Statistics show the proportion of shares held by UK resident individuals fell 1.2 percentage points to 10.8% last year. While not quite the lowest figure on record — it was 10.2% in the financial crisis year of 2008
— it is not far off. In 1963, individuals accounted for 54% of the shares on the stock market. Interestingly the proportion fell, from 28.2% to 20.6%, even during the Thatcherite Eighties when the public were scrambling to pick up shares in the privatised utilities, demutualised building societies, and crowd-pleasing flotations such as Sock Shop.
Meanwhile the total proportion of British domiciled quoted companies owned by foreign investors has grown to a new record of 57.7%. As recently as
1997 it was 28%. Residents of the Cayman Islands are the most enthusiastic buyers of UK shares with an average holding of £424,013 per head.
The proportion of UK listed shares owned by pension funds and insurance companies shares has collapsed from 45.7% in 1997 to a meagre 4.2% now. None of this augurs well for the Chancellor’s ambition to funnel more institutional money into riskier unlisted equities and start-ups as part of a strategy to boost growth.
If Hunt really wants to revive the share-owning democracy he will have to try harder than flogging a stake in a part-nationalised high street bank. Sid’s more interested in Bitcoin these days.
Evening Standard Limited