Top of the list

What do you write four months after taking a break from the newsletter-ing? Of course, it would be easy to revert back to an update-style roundup, but with the US still stuck in its on-and-off-again conflict with Iran, Number 10 gaining a new tenant, and FIFA getting embroiled in geopolitics, jotting everything from this period down in <800 words might be a long shot.

So, in times like these when the news agenda is too quick for me to summarise in pithy prose, it seems fitting that I revert to one of my ol' faithful topics: the long, slow, and agonising decline of the London market.

Two hooks that brought me back

I can point to multitude of hooks that drew me back to my favourite invective (it's a shameless plug, sure, but see some of my past commentary in CapX linked) – but two particularly stand out: Proud Scot and Citibank CEO, Jane Fraser, going studs in on UK bank taxes (of which Mr. Healey may just increase) – and the ongoing car-boot sale of foreign investors buying up big FTSE-listed companies, such as Segro and easyJet.

The two go hand-in-hand: the first, obvs, that the UK is playing host to a suffocatingly anti-growth, high-tax environment, and the second, that some of our brightest and best companies are itching to ditch the Big Smoke for shareholder gains.

Put together, the reading writes itself: London, nay the UK, has become so bleak for business that operating here is slowly becoming downright unprofitable.

A slow bleed since Arm left

A tad The Sun, I know, but we've been bleeding out for a while. Arm Holdings – something I hope our policymakers truly regret – lit the touchpaper of exits from the capital in 2023, ditching the LSE for the NASDAQ, with other big names, CRH and Wise, quickly following in its footsteps. Many commentators – including, shamelessly again (!), myself – rang the alarm bell when these happened, and yet, nothing's been done.  

Since then, London has only stooped deeper and deeper into uncompetitiveness. Hell, if Jane Fraser's any authority to go by, we're even slowly losing to Paris, Japan, and so on as an investment destination.

Why listing rules should be relaxed

So, what should be done then? A ditching of the high-tax fiscal model? Definitely, but that's unlikely. Tax incentives for businesses filing for a London IPO? Perhaps, but if we're being frank, it would likely just be another insipid scheme.

No – what we really need is a relaxing of listing rules.

The fact is this: the listing requirements in our capital are just far too bulky, onerous, and exhaustive to meet. And, while it may sound glib, long-term flourishing requires long-term actions.

The groundwork is already there. For all the measures and acts her Treasury did that I disagreed with, former Chancellor Rachel Reeves was absolutely right to call out our over-regulated market – and while those criticisms, admittedly, didn't materialise in any significant reform, it was certainly a call that received a hell of a lot of support. From politicians, banks, businesses, and investors alike.

Of course, I understand that some people, including any readers here, might disagree with me. You might say it's too drastic, or indeed, too general. Indeed, some might even argue that we should just focus on reaching a defence spending target in the first instance –ushering in a short-term boost and uplift in sentiment around our core index.

But, in my heart of hearts, I truly believe this is right. With London in the state it is, what we really need is to show the international market – both listing hopefuls and the sell-side movers and shakers – that London is a place to float quickly, effectively, and profitably.

Until then, stand out

I'm cognisant this is a long shot, but it would certainly help bring us back on par with New York. Until then, though, my advice to London businesses wanting to attract investment, and perhaps increase your chances of breaking through market pressures, is the following…

… stand out.

Push yourself out into the open, showcase your real expertise to the market, and prove that – in a city where the business conditions aren't overly auspicious – you are worthy of high-grade institutional capital.

In today's high-octane, uncertain world, markets are built on conversation. Defying current sentiment requires placing your expert voices at the front of it.