An influential House of Commons select committee has launched an inquiry into the causes of the UK’s "persistent underinvestment" and explore how the UK can improve access to capital by mobilising greater levels of private and public finance, both domestic and foreign.
With the UK government hoping to improving the economy by securing the highest sustained growth in the G7, the committee argues that low investment is at the core of the government’s challenge. The committee notes that the UK has recorded the lowest share of investment in relation to GDP among the G7 countries in 24 of the last 30 years and ranked in the bottom ten of OECD countries for overall investment intensity. The committee says that closing this investment gap is essential for delivering the productivity and innovation that the UK’s economy needs.
“Britain has world-class science, world-class entrepreneurs, and world class capital,” said Liam Byrne MP, chair of the committee. “But we lack a world-class system to connect them. That’s what this new inquiry is about. Not tweaks at the margins, but a new architecture of investment for a new age of risk. Because if we don’t rethink access to finance now, we won’t just miss our growth targets. We will miss the future.”
In a post on X, Byrne added: “How do we fix the failed marriage that has bedeviled the British economy for years? No matter how hard we have tried we simply can’t get our financiers to fall in love with our scientists, our entrepreneurs, and our changemakers. It’s holding back the growth of our country. Britain has world-class science and world-class capital, but what connects them is failing.”
The inquiry will focus on four key areas:
• Is British investment too low and why? This will take perspectives from economists, analysts and policy researchers and ask several questions, including: "Why has UK investment lagged behind its peers for so so long?"
• Suppliers of capital: This will take views from pension funds, equity markets, venture funds, banks and foreign investors. It will cover several areas including: “How does the UK’s financial infrastructure - including equity and debt markets - support or hinder productive investment?”
• Seekers of capital: This will get the views of startups, scaleups and firms preparing to float; and consider questions such as: "Are public markets fit for purpose for UK companies seeking to list, and what challenges do UK businesses face in accessing growth finance, especially in the scaleup stage?"
• Government strategy and the role of ministers: This will look at, amongst other things, what is the government’s investment target and how is it quantified. How are UK policy institutions like the British Business Bank, National Wealth Fund and Department for Business and Trade working to ‘crowd in’ private finance?
The committee is calling for written evidence from all stakeholders and submissions should address the relevant questions focusing on clear insight, data and recommendations. The deadline for evidence is 12th September 2025.
SCI has long highlighted UK’s poor investment performance including the launch of its Manifesto for an industrial science and innovation strategy during 2023. During July, this year, SCI brought attention to the lost investment opportunities for the UK’s life science sector, in a report commissioned from LEK. The report ‘Unlocking Value in Life Sciences’, analysed how a lack of investment in the sector has impeded the UK’s ability to translate its immense research potential into commercial reality.
Further reading:
• New Industrial Strategy will boost investment say business leaders
• Life Sciences leadership: The UK and the EU set out plans for sector growth and investment
• Industrial Strategy: The outlook for science
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