It was already a bad enough week for the Prime Minister Sir Keir Starmer and the Chancellor Rachel Reeves, what with the collapse of their welfare reforms. But now news has leaked that AstraZeneca’s CEO Sir Pascal Soriot has reportedly discussed moving its listing from London to New York. There is nothing official yet, and no decision has been made. But for the boss of Britain’s most valuable listed company to even contemplate upping sticks spells trouble for the UK economy.
It is not hard to blame him. Over-regulation has turned the London market into a relative backwater. Meanwhile, Wall Street has been booming. The business would be more highly valued on the other side of the Atlantic. US president Donald Trump wants the pharma industry to invest more in the United States – given that sky-high drug prices fuel its profits – and a Wall Street listing would help that. Back in Britain, corporate taxes have already been pushed up sharply, and look likely to go up again over the next few years as the government struggles to pay for the juggernaut of welfare spending. For a successful global business, it is hard to see the point of listing in a small, stagnant economy when it would be warmly welcomed on a far bigger stage.
If AstraZeneca does depart Britain, the London stock market – and the government would be in hot water. AstraZeneca is the FTSE 100’s largest company, and one of the UK’s most successful firms. The government has put life sciences at the core of its industrial strategy, and it remains one of the few industries where the UK is clearly a global leader. Even worse, its departure would send a clear message to other multinationals around the world that it was not worth the bother of investing in Britain, and it would encourage others to leave as well. It would be hard to imagine that GSK would stick around for long. Or Unilever. Or the mining giant Rio Tinto, or HSBC or Diageo. One by one, they would all list their shares in New York, and once they had made that move their headquarters would quickly move as well.
In reality, the government has been far too complacent both about persuading companies to invest in the UK, and about making the London stock market more competitive. Chancellor Rachel Reeves inherited a crisis, but she has so far only managed to make it worse. If AstraZeneca leaves, it will be too late to stop the exodus – and the British economy will be in big trouble.