View from City Road: Poor old UK surrounded by islands of wealth

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The Independent Online
It should be no surprise that rich people keep their money in the Channel Islands and the Isle of Man. But new figures for private investment produced yesterday by the Central Statistical Office are still strikingly large.

There were 22,923 individual shareholdings worth between pounds 10m and pounds 50m in the offshore havens at the end of 1992, and a further 6,154 between pounds 1m and pounds 10m.

This does not mean there were 29,000 offshore millionaires, since many investors will have more than one holding. But the wealth thrown up by the annual survey of share registers gives some idea of what the Government may be missing in tax revenues.

A sample survey of mainland nominee accounts suggested that there were fewer than 9,000 in the same size range. But while there were no individual shareholdings above pounds 50m in the offshore havens, there were 4,534 on the mainland.

The other interesting finding from the survey is that after the paranoia about a German takeover of Rover, foreigners are if anything under-represented on UK share registers. And among foreign investors, those from the European Union are surprisingly thin on the ground. Perhaps we should be encouraging more to come in.

EU shareholders account for only 17.5 per cent of the pounds 75bn of overseas holdings identified in the survey.

US investors, in contrast, own 47.3 per cent, or nearly pounds 37bn. There is a further pounds 15bn of unidentified holdings, but it is unlikely these are all from the EU.

Not only is the EU lagging in UK share ownership, but foreign share investment as a whole has stagnated while pension funds have continued to grow, holding 34.7 per cent of British equities. Only 12.8 per cent of British shares were foreign-owned at the end of 1992, little changed from the previous three years. The long decline of the private investor has ended, as the preliminary results of the survey confirmed last autumn. But the new private punters were disloyal to British manufacturing industry: foreign investors held proportionately more, perhaps a difference of attitude to reflect on.