The new Government is under pressure to reform the moribund London stock markets.
If it fails to do so, it could endanger the party’s growth agenda for the whole of the UK, experts say.
Steven Fine, chief executive of investment bank Peel Hunt, said: ‘London’s equity market doesn’t just serve a small district of the capital. It is an engine room for our entire economy, connecting the funds of savers and investors with businesses to deliver the growth capital that the UK desperately needs.’
The London market risks being hollowed out as overseas investors snap up British businesses, and home-grown firms are lured to list in New York.
Alex Baldock, boss of the electronics chain Currys, said: ‘It has been a difficult two years for UK equities and has felt like you are running up a down escalator if you’re a UK business. The stamp duty on shares should be scrapped and Labour should consider ways to encourage pension funds to invest more in Britain.’
Fine wants Labour to build on Mansion House commitments made by former chancellor Jeremy Hunt to encourage pension funds to invest high-growth businesses.
He wants pension funds to be obliged to reveal how much they invest in British companies. Currently UK shares make up just 4 per cent of the UK pension funds’ portfolios. Calls for Labour to boost the Square Mile come amid alarming data showing London has slipped below stock exchanges in Greece, Turkey and Korea for share floats.
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Figures compiled by the London Stock Exchange Group (LSEG) showed it was 25th in the world for money raised through initial public offerings (IPOs) in the first half of 2024.
Companies making their market debuts have raised just £290 million in Britain this year. That is dwarfed by the £8.5 billion raised on the New York Stock Exchange or the £4.3 billion on the Nasdaq.
An LSEG spokesman said: ‘The UK is the third largest country globally in terms of total equity capital raised with over £17 billion raised so far this year, and over three times as much capital has been raised in London than on the next European exchange.’
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