Business & Finance

LSE chief urges government to boost UK market to stem firm exodus

By Today News Hours Editorial Desk

The London Stock Exchange chief said the UK must do more to support its own companies as many are choosing to list in the US instead of at home. Dame Julia Hoggett told the BBC that the government needs to make the UK stock market more attractive, otherwise large firms will keep looking overseas for growth.

Over recent years, several high‑profile firms have left the London market, are considering a move, or have been bought by foreign investors. The loss of these companies could weaken the UK economy by reducing tax revenues and lowering business valuations.

"If we want Britain to back Britain, which is what I hear the chancellor and the prime minister saying, then let's make sure that we're creating structural incentives to do so," Hoggett said on the BBC’s Big Boss Interview podcast. "We need to take the handbrake off."

The LSE’s main market lists about 930 companies with a total market value of roughly £4.9 trillion. Almost 40 % are international businesses from more than 80 countries. In recent years, firms such as Just Eat (now on the Amsterdam exchange), Tui (Frankfurt) and Flutter (New York) have delisted or moved away from the LSE.

The number of new listings in London has fallen. Last year there were 23 initial public offerings (IPOs) on the London market, raising £2.1 bn. In contrast, the US had 354 IPOs that raised $44 bn (£33 bn). The trend has coincided with a rise in UK investment money flowing into US stocks in search of better returns.

"We talk as a nation about wanting growth in every postcode, but at the moment, a lot of us are funding growth in every zip code," Hoggett said. She added that there was no shortage of great companies or capital, but negative sentiment about the UK market – often exaggerated – had contributed to companies leaving in the past.

She called for the removal of the 0.5 % tax that external Britons pay when buying UK shares, noting that no tax is levied when they buy foreign stocks. She also supports tax credits for Britons investing domestically, a scheme that existed until 2016.

The Confederation of British Industry has urged urgent action to halt the exodus of firms from the London Stock Exchange, calling for lighter regulation, better marketing and incentives for investors.

The government declined to say whether stock market reform would be part of its Budget this month, with a spokesman saying that decisions on tax are a matter for the chancellor to set out at fiscal events rather than on speculation or proposals.