LSE chief urges UK to 'take the handbrake off' and stop firms fleeing overseas

The head of the London Stock Exchange has called on the UK government to create stronger incentives for domestic investment, warning that without structural change, 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 country must make it "more attractive" to put money into UK-listed shares, arguing that current policies effectively push investors towards foreign markets instead. In an interview on the BBC's Big Boss podcast, she said Britain needed to "take the handbrake off" if it genuinely wanted to support its own corporate base.

Her comments come amid growing concern about the health of the London market. Over recent years, a string of well-known companies have either delisted from the LSE, moved their primary listing to another exchange, or been acquired by foreign private investors. The trend has raised fears about the UK's ability to retain high-growth businesses and the tax revenues and job opportunities they generate.

Among the prominent departures, takeaway chain Just Eat transferred its listing to Amsterdam, travel operator Tui chose Frankfurt, and Flutter, the owner of Paddy Power, now trades in New York. Each of these moves represents a loss of prestige and liquidity for London, which has historically been one of the world's leading financial centres. The accumulation of such exits has prompted warnings that the UK could become a backwater for equity trading if the tide is not reversed.

The numbers paint a stark picture of the challenge. London'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. Yet the pipeline of new entrants has slowed dramatically. Last year, just 23 initial public offerings took place in London, raising £2.1bn. By contrast, the United States – which benefits from far deeper capital markets – saw 354 IPOs that raised $44bn, equivalent to roughly £33bn.

Dame Julia pointed to a related trend: a surge in UK investment money flowing into American equities as investors chase better returns. She framed the issue in stark terms, noting that while politicians talk about generating growth "in every postcode" across Britain, much of the capital that could fuel that growth is instead being deployed to fund companies in "every zip code" in the US.

She stressed that the problem is not a lack of quality companies or available capital. "There is no shortage of great companies and no shortage of capital," she said. Instead, she argued that negative sentiment about the UK market – which she described as often exaggerated – has contributed to companies choosing to leave. She urged the nation to "stop throwing shade at ourselves," describing the tendency toward self-criticism as a "national habit."

To address the imbalance, Dame Julia supports specific policy changes. She wants the government to abolish the 0.5% stamp duty tax that Britons pay when buying UK shares, noting that no equivalent tax applies when they purchase foreign stocks. She also backs the reintroduction of tax credits for domestic investment, a scheme that existed until 2016. Such measures, she argues, would create the "structural incentives" needed to keep investment at home.

The Confederation of British Industry, a major business lobbying group, has echoed these concerns, calling for urgent action to stem the flow of companies away from the London Stock Exchange. The CBI has recommended lighter regulation, more effective marketing of the UK as a listing destination, and targeted incentives for investors as part of a broader strategy to halt the exodus.

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

Critics of the current system argue that the UK's tax regime and regulatory environment put domestic markets at a disadvantage compared with global competitors. The stamp duty on share purchases, in particular, is seen by many in the financial sector as a direct disincentive to investing in British companies. Meanwhile, the allure of deeper capital pools and higher valuations in the US continues to draw both companies and investors across the Atlantic.

For Dame Julia, the stakes are clear. Without action, the UK risks a self-reinforcing cycle in which companies leave, investment follows them abroad, and the London market loses further ground to New York and other financial hubs. Her call to "take the handbrake off" is a direct appeal to policymakers to prioritise the competitiveness of the UK's capital markets before more of the country's corporate champions decide their future lies elsewhere.

Whether the chancellor heeds that call in the upcoming Budget remains to be seen. What is certain is that the debate over how to keep British businesses listed in Britain – and British money invested in Britain – is set to intensify in the months ahead.