'Stop throwing shade' - the woman trying to stop firms leaving the UK
British people need more incentives to invest in big firms listed in the UK, Dame Julia Hoggett, boss of the London Stock Exchange, says.
‘Stop throwing shade’ - the woman trying to stop firms leaving the UK
Dame Julia Hoggett says negative sentiment about the UK market has pushed companies to leave in the past
The UK needs to do more to support its own companies at a time when an increasing number are choosing to list their shares in the US instead of at home, the head of the London Stock Exchange (LSE) has told the BBC.
Dame Julia Hoggett said the government needed to make it “more attractive” to invest in the UK stock market, or else major firms would keep looking overseas for their next phase of growth.
In recent years, dozens of large companies have left the London market, are weighing a move, or have been bought by private foreign investors.
The concern is that this weakens the UK economy by cutting 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,” Dame Julia told the BBC’s
“We need to take the handbrake off.”
The LSE’s main market includes about 930 companies with a combined market value of roughly £4.9 trillion.
Nearly 40% are overseas businesses, coming from more than 80 countries.
But over the past few years, many firms have delisted or shifted away from the LSE, including takeaway chain Just Eat, which moved to the Amsterdam stock exchange, travel giant Tui, which chose Frankfurt, and Paddy Power-owner Flutter, which now trades in New York.
At the same time, the number of companies newly listing their shares in London has fallen sharply.
Last year, there were 23 initial public offerings (IPOs) on the London market, raising £2.1bn. In the US, where capital markets are much larger, there were 354, raising $44bn (£33bn).
This has coincided with a sharp increase in UK investment money flowing into US stocks in pursuit of stronger 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,” Dame Julia said.
“There was no shortage of great companies and no shortage of capital,” she added.
But she said negative sentiment about the UK market - often overstated - had helped drive companies away in the past.
“We need to stop throwing shade at ourselves as a nation... it’s a national habit.”
However, she said British people needed more “incentives” to invest in UK stocks.
She wants the government to abolish the 0.5% tax Britons pay when they buy UK shares, noting that there is no tax when they purchase foreign stocks.
She also backs tax credits for Britons investing at home. The UK had such a scheme until 2016.
Business lobbying group the Confederation of British Industry has called for urgent action to stop the exodus of firms from the London Stock Exchange.
It said lighter regulation, stronger marketing and incentives for investors were needed to slow the outflow.
The government declined to say whether stock market reform would be included in its Budget this month.
“As has always been the case, decisions on tax are a matter for the chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals,” a spokesman said.