One of Andy Burnham’s economic advisers has warned of ‘foreign raiders’ snapping up Britain’s most promising start-ups as he suggested the government should more heavily tax domestic pension funds investing overseas. Andy Haldane, the former Bank of England chief economist who is now the president of the British Chambers of
Mauricio Alencar
Thursday 25 June 2026 1:12 pm
One of Andy Burnham’s economic advisers has warned of ‘foreign raiders’ snapping up Britain’s most promising start-ups as he suggested the government should more heavily tax domestic pension funds investing overseas.
Andy Haldane, the former Bank of England chief economist who is now the president of the British Chambers of Commerce (BCC), said tax reliefs should be reformed to boost incentives for more cash to flow into British companies.
Fresh from a speech at a BCC conference in which he decried companies being “plucked off by overseas foreign raiders”, Haldane told City AM that it was an “absolute no-brainer” to adjust the tax system to get investors to pile cash into British businesses and create a bias towards domestic investment.
He said he wanted a “tilting of the playing field” in the tax system and added there was a “million and one ways in which you can go about that”.
But he added that the government should get a better “return” on tax reliefs offered on investments, adding that a change on reliefs to favour British assets over foreign assets would be a “correction of the distortion of markets” for pension funds.
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He cited the examples of European countries and Japan, where investors get tax credits for backing the government’s domestic growth plans.
“We’re not getting much return on that tax [relief] right now because in the main, it is financing investment in foreign companies and foreign governments,” Haldane said.
“The current situation is quite a contorted one. The UK situation is very unusual in that we don’t invest in British businesses. You can think about this tilting as being a correction of the system to more accurately reflect what all other countries on the planet do and indeed what we ourselves used to do a generation ago.”
He said he had not drafted a “detailed proposal” on how investments on British assets would benefit from greater tax reliefs than those on foreign assets.
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During his speech at the BCC conference, Haldane said a plan to back British assets was not about “overly constraining” investment choices, though a shift towards investing more heavily in domestic assets was backed by savers.
Haldane’s tips for Burnham on tax reform
For personal pensions, income tax is not levied on pension contributions at an allowance of £60,000 a year. The tax free lump sum on withdrawals is for 25 per cent of the pot or up to a standard allowance of £268,275.
Haldane suggested existing reliefs on pensions amounted to £50bn in revenue that could have been gained while extra incentives offered through ISAs represented £10bn in possible revenue.
“As a country we spend more on savings tax relief than on defence, yet these benefits are conferred without any accompanying commitment to support UK growth,” he said.
“Most are implicitly supporting US companies and governments.”
His blistering assessment of the UK’s struggles to retain start-ups and allow businesses to scale up may provide Burnham with some economic thinking, with the existing Mansion House Accord reforms and retail investment advertising efforts around Savvy the Squirrel failing to be “dial-moving” for growth.
He called on the government to be bolder on reforms around boosting domestic investment.
“If the government wishes to act, at speed and scale, to take advantage of the UK’s brilliant seed-corn businesses, before they perish on the vine or are plucked off by overseas foreign raiders, then greater boldness of this type is what will be required.”
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