ALEX BRUMMER: The battle for Direct Line as predators prowl

Revitalizing London’s stock markets so that they are more willing and able to support British start-ups and nurture British businesses is crucial to Jeremy Hunt’s agenda as Chancellor.

The UK ISA idea, unveiled in the Budget, is part of a wider effort to support UK shares, including greater transparency about pension fund investments.

The idea of ​​bringing in British pension money to support British technology, such as green technologies, is also on Shadow Chancellor Rachel Reeves’ growth menu.

The focus on UK listed shares comes at a time when several FTSE 350 companies are under siege from foreign buyers. In any case, the premium looks generous.

But we should not forget that London has been unfairly given a Brexit discount compared to New York and other financial markets, even though city and business services are leading in the world. There are good reasons to assume that the cyclical discount will disappear over time.

It is therefore increasingly important that UK boards show dogged determination in fending off opportunistic takeovers, especially of companies with unclear ownership positions.

An important brand at insurer Direct Line is Churchill with its well-known bulldog logo. It is up to the group’s chairman, Danuta Gray, to prove her mettle in Yorkshire and see Belgian invader Ageas disappear from the battlefield after launching a £3.1 billion bid.

It’s easy to dismiss Direct Line as just another general insurer in a crowded field where competition has been blown wide open by comparison sites. That’s ignoring a special place in the British market.

An offshoot of the Royal Bank of Scotland, founded by serial insurance innovator Peter Wood, it was a game changer.

When it came up with the idea of ​​dealing directly with consumers, over the telephone, it broke with the old practice of brokers issuing policies and the disruption of commission structures.

It’s ironic that after breaking the mold, Direct Line has been undermined by regulatory breaches and an inability to move into the digital world quickly enough.

The arrival about a week ago of Aviva’s Adam Winslow as CEO should encourage investors that if Direct Line were to modernize its systems and simplify branding options, a wounded business could be revived.

Direct Line also benefits from a share register where respected British funds Schroder and Liontrust can help thwart an unwanted deal.

Too often, short-term performance decides these things, and big battalion investors are happy to take the money and run.

In the current political climate, when it is so important to get behind London’s markets and asset management, UK institutions must show patience and fortitude or face the wrath of Whitehall.

Bidder Ageas profiles itself as a good owner with a lot of insurance experience. But it’s more complicated than that. One of the earlier British companies, owned by Kwik-Fit (UK), which offered car and home insurance, ended up in the High Court after allegations by Ageas that it had paid too much.

Ageas’s ownership also needs to be closely monitored. The insurer was a breakout from the trans-European financial group Fortis, which was bailed out during the great financial crisis.

Current shareholders include the opaque Chinese holding company Fosun, and a majority stake is still held by the Belgian government.

However honorable Ageas’s intentions may be, placing the fate of ten million customers in such hands does not inspire confidence.

It is foolish that Britain, with an insurance history dating back to the coffee houses of the 17th century, should care so little about its legacy.

There is also reason to be dissatisfied with the way the board of telecoms group Spirent, led by Sir Bill Thomas, the Labor Party’s small business adviser, so quickly agreed to a bid from US rival Viavi.

Valuable British R&D and technology should not be sacrificed so easily.

Business leaders too easily ignore the national interest.