LSE Boss Urges Government to Boost UK Stock Market Appeal Amid Company Exodus

Based on reporting by BBC UK:

Dame Julia Hoggett, the head of the London Stock Exchange (LSE), told the BBC that the UK needs to do more to support its own companies, particularly as an increasing number of them choose to list their shares in the United States instead of at home. She asserted that the government must make it more appealing to invest in the UK stock market to prevent major corporations from seeking growth opportunities abroad.

Over recent years, numerous large firms have either departed the London market, are contemplating a move, or have been acquired by private foreign investors. This trend raises concerns that it weakens the UK economy by lowering tax revenues and depressing business valuations.

Dame Julia advised that structural incentives must be created if the nation wishes to support British businesses. She noted that the LSE's main market currently comprises approximately 930 companies, holding a total market value of around £4.9 trillion, with nearly 40% of these businesses being international entities from over 80 countries.

However, many companies have delisted or relocated from the LSE, citing examples such as the takeaway chain Just Eat moving to the Amsterdam stock exchange, the travel company Tui choosing Frankfurt, and Paddy Power's owner Flutter trading in New York. Furthermore, the number of companies newly listing their shares in London has decreased. Last year, the London market saw 23 initial public offerings (IPOs) raising £2.1bn, contrasting with 354 listings in the US capital markets which raised $44bn (£33bn).

Dame Julia observed that this situation coincides with a significant increase in UK investment capital flowing into US stocks in pursuit of superior returns. She remarked that while there is national discussion about fostering growth everywhere in the UK, currently, much of that growth funding is occurring in different geographical areas. She added that there was neither a scarcity of excellent companies nor a scarcity of capital.

She suggested that negative perceptions regarding the UK market, which she noted were sometimes exaggerated, had contributed to companies leaving in the past, and called for the nation to cease self-criticism.

Regarding investor incentives, Dame Julia stated that British individuals require more encouragement to invest in UK stocks. Specifically, she requested that the government eliminate the 0.5% tax levied on external Britons purchasing UK shares, pointing out that no such tax applies when buying foreign stocks. She also expressed support for the concept of tax credits for Britons who invest domestically, noting that the UK previously had such a scheme until 2016.

Separately, the business lobbying group the Confederation of British Industry has called for immediate action to stop the outflow of firms from the London Stock Exchange, suggesting that reduced regulation, improved marketing, and investor incentives are necessary to curb this trend. A government spokesperson stated that the government declined to comment on whether stock market reform would be included in the upcoming Budget, adding that decisions on taxation are typically set out by the chancellor at fiscal events rather than through routine commentary on speculation.