James Ashton, the outgoing chief executive of the Quoted Companies Alliance (QCA), has called for a significant shift in investment strategy within the United Kingdom, advocating for increased domestic investment and a halt to the rapid sale of British companies to foreign and private equity buyers. Ashton, who is concluding a four-year term leading the organization representing small and medium-sized companies listed on the London stock market, argues that these firms are crucial for national prosperity.
He expressed concern over the numerous acquisitions of British companies, citing examples such as easyJet, Intertek, DCC, Tate & Lyle, Mitie, and Ramsdens. Ashton emphasized that a stock market listing serves as an anchor for jobs, intellectual property, and tax revenue within the UK. He questioned the logic behind overseas acquisitions, using the example of Ramsdens, a company that grew and created jobs in the UK but was ultimately sold to US investors.
"In this summer of takeovers it is really important to remember that a share quote is an anchor in the UK for jobs, for intellectual property and for tax," Ashton stated. He also highlighted a consistent decline in the number of companies trading shares in London, with a reduction observed for 45 consecutive months. Ashton attributes this trend to private equity and overseas buyers acquiring UK companies at low prices due to a lack of domestic backing and a tendency for pension funds to invest heavily in foreign assets.
Ashton proposed making the tax relief afforded to pension funds conditional on their investment in the UK, noting that other countries already incentivize domestic investment. He argued that while pension trustees often prioritize high returns, which may lead them to invest overseas, the well-being of retirees is also linked to the prosperity of their home country, including factors like employment opportunities for future generations. He expressed hope that Chancellor John Healey would consider this issue, drawing a parallel to national security investments.
Beyond investment strategy, Ashton has also championed efforts to reduce the regulatory and cost burdens on smaller listed companies. These initiatives include advocating for the scrapping of stamp duty on share dealings and reforms to audit regulations and governance that disproportionately affect smaller businesses. He also criticized the increasing length of annual reports.
Ashton pointed to the semiconductor and chip design company ARM as a prime example of a valuable British business that was lost to the London market. Despite being acquired by SoftBank in 2016 and subsequently re-floated on Nasdaq, ARM still maintains a significant presence in Cambridge, England. Ashton suggested that the London stock market should have retained such companies, noting that ARM, if still listed in the UK, would be the second most valuable company on the FTSE 100.
Ashton also commented on the challenges facing the investment trust sector, acknowledging its unique assets while facing pressure from external predators. He highlighted companies like Relx, Games Workshop, and Unilever as examples of world-beating businesses that demonstrate the potential of domestic investment. He concluded by suggesting that a positive outlook on Britain's prospects and a focus on local investment are essential for robust economic growth.
James Ashton is 51, educated at Mirfield Free Grammar and the University of St Andrews. His hobbies include paddle boarding, hill walking, and reading. He is married to Viveka Alvestrand and they have a daughter, Alice. The couple also founded Oscar's Book Prize in memory of their son, Oscar, to commemorate the best pre-school book of the year. Ashton is also an independent director at Finsbury Growth & Income Trust.