There’s something broken in Britain’s economy and unless we fix it, we’re going to fall further behind.
Right now, our brightest ideas are too often turned into successful businesses somewhere else. Too many of our most talented entrepreneurs are heading abroad – not because they want to, but because they can’t find the backing they need here at home.
The problem is finance. More specifically, it’s the growing gap between the huge amount of money in the UK financial system and the small share of that money reaching new businesses trying to grow.
It doesn’t make sense. We have world-class science, incredible universities and fantastic local talent. The UK has one of the biggest financial sectors in the world. But somehow, it’s not working for local entrepreneurs who want to build and scale businesses.
So, what’s gone wrong?
For decades, we’ve relied on an old-fashioned model – big banks, big investors and big public markets. But that system is no longer working. High street banks have pulled back from business lending. The London Stock Exchange isn’t what it used to be. And most ordinary savers – including thousands of people in Solihull – don’t get a fair share in the growth of the most exciting companies.
Some new lenders have stepped in, like challenger banks and venture capital firms. But it’s a patchwork, not a proper plan. And it’s still not delivering the kind of long-term investment our start-ups need to succeed.
A big part of the problem is pensions.
Britain’s pension funds hold huge amounts of money, but barely any of it goes into new or growing businesses. In fact, in 2024, less than 1% of defined contribution pensions were invested in private companies. In countries like Australia, it’s more like 5%. That’s ten times more backing for businesses – and it shows.
When UK start-ups can’t get support here, they go elsewhere – usually to the US, where the investment is bigger, faster and easier to get. With them go the jobs, the profits, and the chance to build up industries here in the West Midlands.
That’s why the Business and Trade Committee, which I chair, has launched an inquiry into access to productive finance. We’re asking the questions that need to be asked:
Why aren’t public markets supporting British businesses?
Why can’t we unlock pension savings to invest in local growth?
What needs to change so our financial system works for entrepreneurs again?
This is about more than just numbers. It’s about the future of our economy – and towns like Solihull.
We’ve got the brains, the drive and the ambition. Now we need a financial system that backs our people and our potential. Because if we get this right, we don’t just grow the economy, we bring opportunity back home.
