Negative perceptions of London’s stock market influenced companies’ decisions about where to list, according to Dame Julia Hoggett, chief executive of the London Stock Exchange. Speaking on Big Boss Interview, she acknowledges that companies had delayed or considered listing elsewhere because of the narrative surrounding London, but says that reflected the mood three or four years ago.
“Markets do operate on sentiment,” she says. “We need to stop throwing shade at ourselves as a nation and being a bit surprised if it’s a bit dark, a bit chilly and a bit damp.”
Hoggett also argues that coverage of London’s difficulties does not fully reflect the scale of its markets. She says the London Stock Exchange is Europe’s largest equity market by capital raised that year, the world’s second-largest fixed-income market and its largest market for closed-ended funds. She also points to Britain’s record of creating and growing businesses, saying the country produces more companies valued at over $1bn than anywhere outside the United States and China.
She challenges the assumption that British companies will necessarily perform better by listing in the US. Citing figures for a group of British businesses that raised money there since 2014, she says many have subsequently delisted and only a minority are trading above their listing prices.
Hoggett also says regulatory reform needs to be accompanied by stronger incentives to invest in Britain. Her argument is that the country has substantial pools of savings and promising businesses, but too little domestic capital flowing into those companies.
She wants a route towards abolishing stamp duty on share purchases, which she calls “a pernicious tax”. She proposes starting with relief for UK investment through ISAs and eligible pension funds, while acknowledging the revenue the government would lose. She also advocates a 10% dividend tax credit and inheritance-tax incentives linked to pension investment in Britain.
Asked whether ISA tax advantages should be restricted to British investments, she says: “I genuinely think it’s worth looking at.” She maintains that she is not asking pensioners to accept lower returns, but wants the tax system to make investing in UK companies more attractive.
Presenter: Will Bain
Producer: Olie D’Albertanson
Editor: Henry Jones