How to reboot Britain's capital markets | FT Film

Summary

The video script discusses the challenges facing the UK's financial sector, particularly the shrinking London Stock Exchange and the outflow of tech start-ups to foreign markets like Nasdaq. It highlights the UK's flawed pension system as a core issue, affecting investment in riskier, innovative sectors. The script calls for pension fund revitalization, regulatory changes, and a cultural shift towards risk-taking to foster growth, competitiveness, and the potential for UK companies to become global giants.

Takeaways

• 📉 The London stock market is experiencing a downturn with an outflow of investment, affecting the city's economic vitality.
• 🌐 UK tech start-ups are increasingly drawn to list on the US-based Nasdaq, potentially redirecting returns to foreign investors.
• 💡 A revitalization of the UK economy hinges on pension funds investing in riskier areas to stimulate growth.
• 📊 The London Stock Exchange has seen a significant decline in the number of listed companies and new market entries since 1997.
• 🌍 The UK's shrinking share in global equities is a concern, with the FTSE's growth lagging behind US markets.
• 🏭 The UK market is dominated by 'old economy' sectors like mining and oil, which are less attractive to asset managers compared to 'new economy' sectors like tech and AI.
• 🔄 Large companies, including those in the FTSE 100, are moving their primary listings out of the UK, signaling a need for change.
• 🔄 There is a push for regulatory and rule changes to improve the situation and reposition London as a global financial hub.
• 🏦 The UK's pension system structure and risk-taking culture are specific issues that need addressing to boost the economy.
• 🎓 The UK has a strong start-up scene, especially in biosciences and fintech, but there is a concern about becoming merely an 'incubator economy'.
• 💼 There is a call for a change in perception towards executive pay, especially if it is merited by performance and contributes to company growth.

Q & A

What is the current state of the London stock market according to the transcript?

The London stock market is suffering from an outflow of investment and is shrinking, with the number of companies listed on public exchanges having fallen significantly since 1997.

Why are tech start-ups in the UK being tempted to list on Nasdaq?

Tech start-ups are attracted to list on Nasdaq because it could potentially offer them greater returns, which would go to overseas investors rather than staying within the UK economy.

What is identified as the core problem affecting the UK's economy in the transcript?

The core problem is the UK's flawed pension system, which is not effectively investing in risk areas of the economy, contributing to the decline of the London Stock Exchange.

How has the growth of the FTSE compared to the US market over the last decade?

The growth of the FTSE has been significantly lower than that of the US market. While the FTSE has just reached 8,000, the growth in the US has been much higher during the same period.

What sectors currently dominate the UK markets and why are they problematic?

The UK markets are dominated by old economy sectors like mining and oil, which are not as attractive to asset managers looking for exciting new economy investments such as tech and artificial intelligence.

What is the Edinburgh reforms and why are they significant?

The Edinburgh reforms are a suite of proposals put forward by the chancellor to revitalize the UK economy by changing rules and regulations, aiming to boost the stock exchange and support private company growth.

How do the political parties view the stock exchange and private company growth?

Both the Conservative party and the Labour party see boosting the stock exchange and helping the growth of private companies as a core part of their shared agenda to make the UK economy more competitive internationally.

What is the concern about the UK becoming an 'incubator economy'?

The concern is that the UK may only be successful in creating start-ups but fail to finance and retain these companies in the long term, leading to them being bought by foreign corporations or moving their headquarters outside the UK.

What is the role of the Capital Markets Industry Task Force?

The Capital Markets Industry Task Force was established to bring together people from different parts of the economic ecosystem, particularly to connect those with capital to those who need it, in order to stimulate growth and investment in the UK.

Why is the UK pension system's investment in UK equities considered a problem?

The UK pension system's underinvestment in UK equities is problematic because it results in a lack of domestic funding for UK businesses, leading to a reliance on foreign investment and potentially hindering the growth of the UK economy.

How has the UK's attitude towards risk-taking in investments changed over time?

The UK's attitude towards risk-taking has been negatively impacted by past events such as the collapse of Robert Maxwell's publishing empire, leading to a shift towards safer investments like bonds and away from equities, especially UK equities.

Outlines

00:00

📉 Decline of London Stock Exchange and Impact on UK Economy

The script discusses the precarious state of the London Stock Exchange, which is experiencing a significant outflow of investment and a decrease in the number of listed companies. The UK's flawed pension system is identified as a core issue, with pension funds not investing in riskier areas of the economy, leading to a stagnation in growth compared to the US. The dominance of old economy sectors like mining and oil is highlighted, along with the departure of large companies like Shell considering leaving the UK. Initiatives such as the Edinburgh reforms are mentioned as potential solutions, with bipartisan support expected to continue post-election. The script emphasizes the need for a revitalized stock exchange and a more competitive UK economy.

05:00

🚀 UK Tech Ecosystem Growth and Challenges in Scaling

This paragraph focuses on the growth of the UK tech ecosystem, with the country ranking as the third-largest in the world. Despite this, there is a recognition that there is a significant gap to bridge before it can rival Silicon Valley. The paragraph introduces Matthew Scullion, CEO of Matillion, who discusses the company's growth and funding. It also touches on the thriving start-up scene in sectors like biosciences and fintech, with successful spin-outs from prestigious universities. However, there is a concern that the UK may become an 'incubator economy,' with many start-ups ultimately being bought by foreign corporations, highlighting the need for domestic investment to support long-term growth.

10:03

🌐 Desire for a British Tech Giant and the Challenge of Domestic Investment

The speaker expresses a desire to see a British equivalent to American tech giants like Microsoft or Alphabet, recognizing the potential for the UK to create a company with a trillion-dollar market cap. However, the current state of the UK stock market and the challenges of domestic investment are acknowledged. The US is praised for creating an environment conducive to the growth of small companies, and the question is raised whether the UK can replicate this success in a high-interest-rate environment. The Capital Markets Industry Task Force is introduced as an initiative to connect capital with those who need it, aiming to stimulate the financial services sector and encourage pension funds to invest more in UK equities.

15:04

💼 The UK Pension System's Impact on Risk-Taking and Investment

This paragraph delves into the structure of the UK pension system, which is criticized for not taking enough risk and for its underinvestment in UK equities. The speaker discusses the historical context, including the aftermath of Robert Maxwell's collapse and the subsequent regulatory changes that pushed pension funds into bonds. The lack of an 'equity culture' is identified as a problem, with UK pension funds lagging behind in terms of long-term returns compared to other OECD countries. The paragraph also touches on potential reforms, including channeling more money into private assets and consolidating pension pots, to encourage a shift towards riskier investments and better long-term returns.

20:08

🏦 Cultural Differences in Savings and Investment: A Call for Change

The final paragraph addresses the cultural differences between the UK and the US in terms of savings and investment. It contrasts the American approach of investing stimulus checks into the stock market with the British tendency to be more cautious with financial risk. The speaker calls for a change in this culture to improve financial literacy and encourage investment in higher-return assets. The paragraph emphasizes the urgency of this issue for the prosperity of the entire country, not just the financial sector.

Keywords

💡Delicate juncture

This phrase refers to a sensitive and critical point in time where the outcome can be significantly influenced by current actions. In the context of the video, it is used to describe the precarious state of the City of London's financial sector, suggesting that immediate and careful measures are needed to avoid negative consequences.

💡Outflow of investment

This term describes a situation where investments are being withdrawn or moved out of a particular market or region. The script mentions that the London stock market is suffering from this outflow, indicating a loss of capital that could impact its growth and stability.

💡Tech start-ups

Tech start-ups refer to newly established technology companies that are typically characterized by innovative ideas and rapid growth potential. The video discusses how these UK-based companies are tempted to list on foreign exchanges like Nasdaq, which could lead to a loss of domestic investment and innovation.

💡Pension system

A pension system is a fundamental part of a country's social security infrastructure, providing retirement income. The script identifies flaws in the UK's pension system as a core issue, suggesting that its structure and investment strategies may be hindering economic revitalization by not effectively investing in riskier, yet potentially high-reward sectors of the economy.

💡London Stock Exchange

The London Stock Exchange (LSE) is a major global platform for securities trading. The script points out that the LSE is shrinking, with fewer companies listed and a decline in new market entries, which reflects a broader issue of the UK's waning role in global equity markets.

💡Old economy sectors

This term contrasts with 'new economy sectors' and typically includes traditional industries such as mining and oil. The script notes that the UK markets are dominated by these sectors, which may not attract the same level of investment and excitement as emerging sectors, thus potentially slowing economic innovation and growth.

💡IPO activity

IPO stands for Initial Public Offering, which is the process by which a private company goes public by offering its shares to be traded on a stock exchange. The script mentions subdued IPO activity in London, indicating a slowdown in the number of companies choosing to go public, which could impact the vibrancy of the capital market.

💡Edinburgh reforms

The Edinburgh reforms mentioned in the script refer to a set of proposals aimed at improving the UK's financial market conditions. They represent an effort to revitalize the economy by addressing regulatory and structural issues within the financial sector.

💡Incubator economy

An incubator economy is a term used to describe a situation where a country or region primarily serves as a breeding ground for new businesses but fails to retain and grow them to maturity. The script expresses concern that the UK might become such an economy, where start-ups are nurtured but not sustained, leading to a loss of potential economic benefits.

💡Risk-taking culture

This concept relates to the willingness of investors and businesses to engage in ventures that involve uncertainty and the potential for both loss and significant gain. The script suggests that the UK's culture of risk-taking may be lacking, which could be a barrier to economic growth and innovation.

💡Financial literacy

Financial literacy refers to the knowledge and understanding of financial concepts and the ability to apply them. The script implies that improving financial literacy in the UK could help to increase savings and investment, leading to better preparation for retirement and potentially higher returns on investments.

Highlights

The London stock market is suffering from an outflow of investment.

UK tech start-ups are tempted to list on Nasdaq, benefiting overseas investors.

The UK's flawed pension system is at the heart of the problem.

The London Stock Exchange is shrinking, with a significant drop in listed companies since 1997.

The UK's growth in the FTSE is significantly lower compared to the US.

UK markets are dominated by old economy sectors, lacking excitement for asset managers.

Major companies like Flutter and CRH are moving their primary listings out of the UK.

The Edinburgh reforms aim to revitalize the UK economy by changing rules and regulations.

Bipartisan support exists for reforms to boost the stock exchange and private company growth.

The UK has the potential to be a global tech hub, with a thriving start-up scene.

The UK is at risk of becoming an incubator economy, losing companies to foreign investment.

UK private investors focus on minimizing risk rather than seeking high growth potential.

The UK pension system is underweight in its own home market, unlike other countries.

Pension reforms are being considered to channel more money into private assets.

The Capital Markets Industry Task Force aims to connect capital providers with those who need it.

The UK needs to focus on financial literacy and directing savings towards higher returning assets.

Cultural differences in money management between the US and the UK impact investment behaviors.

Transcripts

The City is at quite a delicate juncture.

The London stock market has been suffering

from an outflow of investment.

Tech start-ups in the UK are being tempted to list on Nasdaq.

That means that the returns that those companies make

will go to overseas investors.

At the heart of the problem is the UK's flawed pension system.

You're only going to revitalise the UK

if we can get pension funds investing again

into risk areas of the economy.

The London Stock Exchange is shrinking.

That much is clear.

Since 1997 the number of companies

listed on public exchanges has fallen by almost a half,

and the number of new companies coming to market

is down by about a third.

That means that the UK accounts for a shrinking

part of the global pot of global equities.

When I started working in the City nearly a decade ago,

we were talking about the FTSE, would it reach 7,000?

And here we are nine years later and it's just breasted 8,000

for the first time.

That level of growth is just nowhere

near what you've seen in the US in that time.

A big problem is that the UK markets

are dominated by the so-called old economy sectors, things

like mining and oil.

These are not the sorts of investments

that get a lot of asset managers out of bed

in the morning excited about putting money to work.

The new economy, tech, artificial intelligence,

all of that stuff, is just not here.

You've seen companies such as Flutter, which

owns Paddy Power and Betfair.

You've seen CRH, big FTSE 100 groups,

move their primary listing out of the UK to the US.

Even the really big oil companies

like Shell, even the fact that it had crossed their mind

to maybe leave Europe, maybe leave the UK,

this was the wake-up call.

I think that the City really needed

to start taking this seriously.

London, a typical day on the stock exchange, with members

engaged in the busy round of buying and placing shares.

In an ordinary market, what you'd normally have

is companies replacing them, and so that ordinary churn

is a normal part of a vibrant capital market.

I think the fact that IPO activity both in London

and globally has been so subdued for the last couple of years

obviously places a greater emphasis

and focus on those companies that have made those decisions.

There's lots of initiatives to try and improve the situation,

to change rules, to change regulations.

There are a lot of people trying to talk up London and say

that this is part of a wider global problem:

that many markets are suffering.

But there are also specific issues

around the structure of the UK pension system

and really the entire culture of risk-taking.

The chancellor has put forward a set

of what's been called the Edinburgh reforms.

So a whole suite of little proposals that all put together

could start to try and turn this tanker around.

I think there's bipartisan support for this.

So I think that whoever is the next government,

I think this kind of impetus will remain there.

We will have a general election on the 4th of July.

Realistically, irrespective of the outcome of that vote,

this reform agenda is likely to continue

in broadly the same shape.

The Conservative party and the Labour party both see boosting

the stock exchange and helping the growth of private companies

as a core part of their shared agenda effectively of trying

to help the UK economy to be more competitive

internationally.

I don't think it will take very much for people

to see the attractiveness of London rekindled,

and certainly we're making sure there

are going to be no regulatory barriers to that.

The history of our stockbroking goes back to about 1670

when our foreign trade began to expand.

I think the listing rules in the UK

haven't changed substantially in quite a quite a long time.

So I this is an opportunity to put London back

into a global context.

There is a bit of negativity and declinism

at the moment about London's position.

And I think it is wholly misplaced

because it's based on a misunderstanding of some bigger

trends that are happening from which London and the UK

are incredibly well-placed to benefit from.

In the UK we feel really squeamish

about senior executives at listed companies earning

lots of money.

They're fat cats.

They're the bad guys.

There's a very strong argument: this is something

that we have to get over.

I have no problem with high levels of executive pay

if it is merited by the performance

that someone does in growing a company,

and in particular, I think for founders of companies.

I mean, I haven't heard anyone complain about Richard Branson

being a billionaire, because I think people recognise that

the business he set up is extraordinary.

And I think people will feel the same

about the new generation of tech billionaires

that I hope we'll see in the UK.

My name is Matthew Scullion.

I'm the CEO and co-founder of Matillion.

We're about 450 people.

We were founded in 2011 and we sell our software

all over the world.

We wanted to be at the intersection of two

mega trends, cloud and data.

Around 2014 we developed some technology for our own use

actually, and once we got it finished it worked so well

we could feel that sucking sound of need from the market.

And consequently we needed to grow our business quickly.

That's why we've raised $300mn.

million.

So the UK is now the third trillion dollar tech ecosystem

in the world.

The UK has a phenomenal position.

It's got a lot of the ingredients

to really drive a huge amount of economic growth in the UK.

If you look at the last decade, more

unicorns in this country than anywhere other than the US

and China.

I think that's a pretty good record and a good base for us

to start from.

Outside the US, we have the largest financial services

ecosystem, which means that we are getting

the innovation that's leading to the tech

start-ups and the financing.

That means that it really is credible to want

to be the world's next, really giant tech hub.

Could you really recreate Silicon Valley in the UK?

I mean, dream big, sure.

But there's an awfully long way to go before we get there.

I'm Avion Gray, CEO and co-founder of Belong.

Belong is the first platform in the world

to offer a mortgage on stocks.

We recently closed our pre-seed round and that gave us

the capital that we needed to hire the team

and build the business and also launch our private beta

and get the product and the platform

into the hands of real customers.

The VC investors were largely UK based

and our angel investors came from all over the world.

The UK has a thriving start-up scene, particularly in sectors

like biosciences and fintech.

There are some great spin-outs coming from Oxford and Cambridge

universities.

The experience of starting a business

has been a positive one.

Firstly, we have been very impressed by the pool of talent

that we've been able to tap into.

There's also a very impressive sort

of cottage industry of tech providers

that sort of surround fintech businesses like Belong.

At the start-up and scale-up phase

a lot of the government schemes have been fantastically

successful and you can see that in the number of unicorns

that the UK is creating.

Equally, at the large cap end of the scale,

if you look at the FTSE 100, you've got plentiful capital.

A lot of the focus at the moment is going on to that mid stage,

that growth stage where companies are often

looking to raise tens of millions of pounds.

There is a concern, including at the UK's economic development

bank and elsewhere, that basically the UK

is in danger of becoming an incubator economy.

In general, your narrative on how

you're talking about that to me sounds absolutely bang on.

Of that money we've raised, only $mn came from the UK.

All the rest came from Silicon Valley.

Once you've taken foreign money it's

likely that all the money after that

will also come from that geography.

And by the time you come to a liquidity event,

your cap table will mostly be foreign investment

and, as importantly, your board will mostly

be representatives of that foreign investment,

making it more likely that the company ultimately

trends towards becoming a company headquartered

outside of the UK or bought by an American company or whatever.

In the past decade, more than 5,000 UK start-ups have been

bought by corporate buyers, many of them again outside the UK.

If the UK is going to drive economic growth it needs to be

able to finance and keep those companies into the long term

and that means being able to take them all the way from

start-ups, all the way through scaling,

all the way to being worth hundreds of billions of pounds -

global companies, but doing it from the UK.

The typical playbook for investments with UK private

investors is to invest in companies where they know that

they can increase the value of those companies and they work

to increase the value and minimise the risk of losing out.

I like to describe it as 3X and don't lose your shirt.

Unfortunately, what you will never get

is Apple or Google or Netflix.

I'd like to see a British Alphabet.

I'd like to see a British Microsoft.

It might not be for a decade, but I'd

like to see a homegrown company with, you know,

a trillion dollar cap.

The entire FTSE 100 is worth less than Apple.

And he wants to create something of a similar scale in the UK

within a decade.

If he succeeds that would absolutely

dwarf what is already on the FTSE.

The UK stock market would have to be

on a totally different trajectory in another world

to what it is now for that to be the case within 10 years.

It must be the American way of doing things that makes you

the luckiest guy in the world.

The US understood that low interest rates

created a perfect environment for getting small companies

off the ground and making them enormous

and making them incredibly successful,

fuelled by cheap debt.

So can the UK recreate that trick in an environment

where interest rates in a lot of major economies

are standing at about 5 per cent?

It's a really big ask.

I wouldn't say that it's impossible.

I'm not pessimistic about this necessarily,

but it's a really, really tough task.

The Capital Markets Industry Task Force

was established for a time limited period

to try to bring together people from different parts

of the ecosystem, but particularly bring together

the people who have the capital with the people who

need the capital.

If you look at how CMIT is composed,

it's not thousands of people.

It's a small number of people, each one of whom

is meant to represent parts of the economic flywheel

here in the UK.

The first time I walked into the room it was quite intimidating.

Most of the other people were sirs or dames.

They're running gigantic corporations.

But they're also representative of the public market

side of the equation, the companies that have already

made it big enough.

To answer the question of how we make more of those.

you need to talk to the proto-public companies, which

is what I represent.

So yeah, sometimes I feel like the leather jacket

versus the pinstripe suits.

But if we want to crack this code

we don't just need to look at what we do in the City.

We need to look at what we do in the supply

chain of private company business building.

There's no point having the world's best public markets

if there's no companies to list on it.

And that's the part of CMIT I get passionate about.

And suddenly you have bigwigs from across the City,

some kind of very influential people

that are scurrying around behind the scenes,

pulling every lever they can think of,

pulling every string they can see,

to do all of the many hundreds of little tiny things

that we need to do that will add up to a whole of possibly

turning this around.

So the next logical question you have to ask

is what do we need to do to really fire up

our financial services sector, but also

why our pension funds invest so little in the UK,

where in other big markets you could

count on a big amount of domestic pension fund investment

to support any IPO.

One of the things that the chancellor, Jeremy Hunt,

has been talking about recently in his latest budget

is saying that he wants UK pension systems to just explain

how much of their portfolios is held in UK equities.

To my mind this is the thin end of the wedge.

I think pension systems are going

to start coming under a lot more pressure

to put more money to work in UK equity markets and UK stocks.

The issue with that is when you talk

to the people who manage pension funds for a living,

they don't want to be told what to buy by Jeremy Hunt or Rachel

Reeves or anybody else.

They want to do what is right.

They want to get the best returns they can.

We're at a bit of a kind of, you know, slightly at loggerheads

here.

So we're sitting here in the storage centre for the national

Science Museum, and we are surrounded by British

innovation, stuff that's gone back over a couple of hundred

years of proper risk-taking.

And the key to my mind that we face

is: are we seeing the risk-taking today being

funded in the UK to allow this to perpetuate into the future?

So Schroders started as largely a public markets

business, running listed equities around the world

for our clients.

I first joined Schroders in 1988.

75 per cent of our assets were invested in UK equities.

Today that number is less than 2 per cent.

The UK has got the second largest pool of pension fund

assets in the world, but it's not structured in a way

that it can be easily mobilised.

You've got three different pools of capital.

You've got the old style defined benefit pension schemes.

Then there's the new style defined contribution schemes,

and then there's the pools of insurance capital.

The major challenge the UK faces is the two biggest

pots of capital with insurance companies

and with defined benefit pension funds do not take risk.

And this lack of risk-taking taking in our pension funds

shows up in their long-term returns.

So the UK is towards the bottom of the pack in a ranking

compiled by the OECD.

Large parts of the UK pension system

are absolutely dominated by bonds.

They buy bonds.

They love bonds.

Bonds suit their needs.

Bonds suit their regulatory framework.

They suit making sure that they're

meeting the requirements of retirees when their time comes.

But they've lost that equity culture along the way,

and they've lost this willingness

to put money to work in riskier ventures, in younger companies.

And that's a really difficult thing to fix.

To understand the root cause of all of this you have to go back

to the early 90s and the death of Robert Maxwell.

So after he died and his publishing empire collapsed

it turned out he'd been pillaging the pension fund

to prop up some of his companies.

And regulation responded to that by reducing the amount of risk

that pension funds could take with their assets,

pushing them to invest in bonds in particular, which we've seen

and are generally seen as lower risk.

But that had the effect of pushing money out of equities.

Where pension funds kept equities

they tended to move away from UK equities

to global equities, which was really

just them saying that they wanted to invest in US growth

companies.

People from all walks of life, workers, farmers, housewives,

all of us send our daughters to work in our business system,

in the hope of earning dividends or interest on our investments.

That is a huge contrast to the natural domestic bias

that nearly every other country will

have, which is somewhere perhaps 20, 25 per cent,

depending on the country.

And yet we've got some of the best science and technology

businesses in the world.

What we are doing is absolutely in the interests of pension fund

holders, of people who are going to be

needing to draw down a pension at the end of their lives.

It just instinctively feels ridiculous

that the UK has the only big pension

system in the world that is underweight its own home market.

This doesn't happen anywhere else.

It's only the Brits could do this.

But this just feels like something that can and should

be tweaked so that we can start to turn it around.

So there are several pension reforms

that the government is looking at.

One is channelling more money into private assets.

Another is consolidating smaller pension pots

into one larger one.

And there's also a focus on trying

to think of returns, net of fees, rather than just

the headline charges.

My name is Nick Jansa and I'm responsible for Ontario

Teachers' Pension Plan in Europe.

Ultimately, our fiduciary duty is to deliver returns

to our members, and having the choice

as to where to invest those we believe

is the best path to success.

So Ontario Teachers' Pension Fund

is one of the pioneers of modern pension fund management.

It's about twice the size of its nearest counterpart in the UK

and its returns are enviable.

We need to consolidate our pension fund industry.

It's far too big.

We need to make sure that the regulatory structure rewards

people who invest for long term returns.

Financial services is an area where

we believe there's good growth within the global economy.

So 7iM is a vertically integrated UK wealth management

company.

We had been tracking and monitoring it

for about three years and when the company came up for sale

we were able to move very quickly and directly because we

were an active investor.

Within the UK specifically it could

be anything from helping start-up ventures all the way

through to companies that are growing

and trying to help and offer services, something like Busy

Bees, for example, in terms of the child care sector,

through to infrastructure at the other end, which

could be something like our investment in the Scottish

and Southern transmission network.

I think there's something like 62mn individual pension pots

in the UK which have never been aggregated.

Overseas, the Australians, the Canadians

have done a great job of making those pools of capital scalable.

I don't think we have the same savings and investment culture

that you do in the US where everyone has their 401(k).

I think we could do a lot more around financial literacy.

The amount of money which is flowing into people's savings

is nothing like sufficient to provide for them in retirement.

But even when it gets into their pension pots

it's then directed to low returning

assets that are low risk.

So at every stage we've got things

that are aiming off and producing less return.

And one thing that always strikes

me is that in the pandemic, in lockdowns, Americans

got cheques in the post, right?

You know, Uncle Sam sent them some money

because they couldn't go to work.

And what did Americans do with this money?

A lot of them punted on stocks.

Now, in a million years, if you sent a check for £1,000

to the average Brit, there is no way on God's green Earth they

would start punting around in the stock market with that

money.

We just think differently.

We have a different sort of culture around money

and that is a much more difficult thing to fix.

There's a tremendous urgency here,

and this is not about the City of London.

It's not about bankers in suits.

It's about the prosperity of the entire country.