The government needs to “roll out the red carpet” for companies mulling an IPO if the City is to solve the listings drought that has gripped London over the past year, a top City body has warned.
In a letter to Chancellor Jeremy Hunt ahead of his budget on March 6, TheCityUK, which represents the UK’s financial services sector, said the government needs to be more proactive in wooing companies and championing the appeal of London’s markets.
The warning comes after a sharp drop-off in listings over the past year which saw just 23 IPOs on the London Stock Exchange, down from 45 in 2022, which itself was a 62 per cent drop on the record 119 listings in 2021.
The number of firms listed in London has now cratered by around 40 per cent from its peak in 2008.
Among a host of asks for Jeremy Hunt’s budget next month, TheCityUK said that the Treasury should establish a single point of contact for firms that will coordinate with regulators and help court prosepctive IPO candidates.
“The government should roll out the red carpet for companies that may seek to list in the UK with better and more proactive support,” Miles Celic, TheCityUK chief executive wrote in his letter to Hunt.
“The budget should establish a single point of government engagement for companies considering listing on UK exchanges to ensure there is strategic, structured and coordinated engagement across government for those companies identified as having high growth potential.”
Officials at the Financial Conduct Authority should also be “brought into any initiative to provide a more coordinated approach for firms considering listing”, Celic said.
London has suffered a series of bruising snubs over the past year, including from the Cambridge chipmaker Arm, which floated in a blockbuster IPO in New York last year despite a charm offensive from the government.
Efforts to charm Arm came under fire from some City figures, with one tech boss telling City A.M. it was a lesson in “how not to do it”.
The calls for a more joined up campaigning approach came amid a list of demands from TheCityUK, including a call for stamp duty on share trading to be scrapped. The tax is already proving to be a pain-point between Hunt and the Square Mile after the Treasury doubled down on the levy last week.
“Stamp duty on trading is a direct tax on liquidity which places the UK at a competitive disadvantage,” Celic warned. “It should be removed in the Budget to incentivise greater UK institutional and retail investment into UK equities.”
The Quoted Companies Alliance and investment bank Peel Hunt both called on Hunt to ditch the tax last week.
Analysis by Peel Hunt suggested that a dent to revenues would be more than offset by an uptick in income through capital gains and inheritance tax.
A demand increase of ten per cent in the UK market would add £250bn of value, of which £110bn would be added to UK-based investors, Peel Hunt said.
A Treasury spokesperson said: “The government welcomes CityUK’s representation to the budget, as the UK takes forward ambitious reforms to the rules governing its capital markets, building on our continued success as Europe’s leading hub for investment.”