London Stock Exchange Chief Urges UK to Back British Firms as Listings Exodus Accelerates

The head of the London Stock Exchange has issued a direct appeal to the UK government to create stronger incentives for domestic investment, warning that without structural changes, an increasing number of British companies will continue to seek listings and growth capital abroad.

Dame Julia Hoggett, who leads the LSE, told the BBC that the negative narrative surrounding the UK market has become a self-fulfilling prophecy, pushing firms to look overseas for their next stage of development. She argued that the country must make it more attractive to invest in UK equities or risk watching its most promising businesses migrate to New York, Frankfurt and Amsterdam.

In an interview with the BBC's Big Boss podcast, Dame Julia said the government needed to take decisive action. "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," she said. "We need to take the handbrake off."

Her comments come amid a sustained period of departures from the London market. Scores of major firms have either delisted, moved their primary listing overseas, or been acquired by foreign private investors in recent years. The trend has raised concerns about the long-term health of the UK's capital markets and their contribution to the broader economy.

The LSE's main market currently hosts around 930 companies with a combined market value of approximately £4.9 trillion. Nearly 40% of those businesses are international, originating from more than 80 countries. Despite this significant international presence, the flow of companies choosing London as their home has slowed considerably.

Recent high-profile exits illustrate the challenge. Takeaway chain Just Eat moved its listing to Amsterdam, travel giant Tui opted for Frankfurt, and Flutter, the owner of Paddy Power, now trades in New York. These departures represent a loss of prestige and trading activity for London, as well as a reduction in the pool of UK-listed shares available to domestic investors.

The decline in new listings is equally stark. Last year, London hosted just 23 initial public offerings, raising £2.1 billion. By contrast, the United States, with its far larger capital markets, saw 354 IPOs that raised $44 billion, equivalent to roughly £33 billion. The disparity underscores the growing gravitational pull of American exchanges, particularly for technology and high-growth companies.

Compounding the problem is a surge in UK investment capital flowing into US stocks as investors chase higher returns. Dame Julia framed this as a paradox that undermines the government's stated goal of spreading prosperity across the country. "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," she said.

She insisted that the UK does not suffer from a lack of quality companies or available capital. Instead, she pointed to a persistent negative sentiment about the UK market, which she described as often exaggerated and damaging. "We need to stop throwing shade at ourselves as a nation," she said, calling it "a national habit" that has contributed to companies leaving.

To reverse the trend, Dame Julia is advocating for specific policy changes. She wants the government to scrap the 0.5% stamp duty tax that Britons pay when purchasing UK shares, noting that no equivalent tax exists when they buy foreign stocks. She also supports reintroducing tax credits for domestic investment, a scheme that was available until 2016 but has since been abandoned.

The Confederation of British Industry, a leading business lobbying group, has echoed these concerns. It has called for urgent government action to halt the exodus of firms from the London Stock Exchange, recommending lighter regulation, more effective marketing of the UK market, and targeted incentives for investors.

The government has so far declined to confirm whether stock market reform will feature in this month's Budget. A spokesman said that tax decisions are a matter for the chancellor to announce at fiscal events, rather than commenting on speculation or proposals. The response suggests that any significant changes may not be imminent, despite mounting pressure from business leaders.

The implications of continued departures are substantial. A weakened UK stock market reduces tax revenues from trading and capital gains, depresses business valuations, and makes it harder for domestic companies to access growth capital. It also diminishes London's status as a global financial hub, potentially undermining the UK's broader economic competitiveness.

Dame Julia's intervention is notable because it comes from the head of the institution most directly affected by the listings drain. Her willingness to criticise the national mood and call for specific tax reforms signals a growing impatience within the financial sector. Whether the government will respond with concrete measures remains uncertain, but the pressure to act is clearly intensifying.

For now, the LSE chief's message is clear: the UK must stop talking down its own market and start creating the conditions that make investing in British companies genuinely attractive. Without such changes, the flow of firms and capital to overseas exchanges is likely to continue, with consequences that will be felt across the entire economy.