London Stock Exchange Chief Urges UK to Back British Firms as More Companies Look Overseas

The head of the London Stock Exchange has issued a blunt warning that Britain must do far more to support its own businesses, as a growing number of companies choose to list their shares in the United States instead of at home.

Dame Julia Hoggett, who leads the LSE, told the BBC that the government needs to make investing in the UK stock market "more attractive" or risk watching major firms continue to seek their next stage of growth abroad. Her comments come amid mounting concern about the health of London's position as a global financial centre.

Over recent years, a significant number of large companies have either departed the London market, signalled their intention to do so, or been acquired by private foreign investors. The trend has raised fears that the UK economy could be weakened through reduced tax revenues and depressed business valuations.

In an interview with the BBC's Big Boss podcast, Dame Julia called on policymakers to act decisively. She said that if Britain genuinely wants to "back Britain" — a phrase she noted hearing from both the chancellor and the prime minister — then structural incentives must be created to encourage domestic investment. "We need to take the handbrake off," she said.

The LSE's main market currently hosts around 930 companies, with a combined market value of approximately £4.9 trillion. Nearly 40% of these are international businesses, originating from more than 80 countries. Despite this scale, the exchange has seen a steady stream of high-profile departures in recent years.

Among the notable exits, takeaway chain Just Eat moved its listing to the Amsterdam stock exchange, travel giant Tui opted for Frankfurt, and Flutter, the owner of Paddy Power, now trades in New York. These departures illustrate a broader pattern of companies seeking larger capital pools and potentially higher valuations elsewhere.

Meanwhile, the pipeline of new listings in London has narrowed considerably. Last year, the London market recorded just 23 initial public offerings (IPOs), raising £2.1 billion. By contrast, the United States — which benefits from much deeper capital markets — saw 354 IPOs, raising $44 billion, equivalent to roughly £33 billion.

This disparity has coincided with a marked rise in UK investment money flowing into US stocks as investors chase better returns. Dame Julia framed the issue in stark terms, noting that while the nation talks about wanting growth in every postcode, much of the capital is actually funding growth in American zip codes instead.

She emphasised that there is "no shortage of great companies and no shortage of capital" in the UK. However, negative sentiment about the UK market — which she described as often exaggerated — has contributed to companies leaving in the past. "We need to stop throwing shade at ourselves as a nation," she said, calling it "a national habit."

To reverse the trend, Dame Julia is advocating for specific policy changes. She wants the government to scrap the 0.5% tax that Britons pay when purchasing UK shares, pointing out that no such tax applies when they buy foreign stocks. She also supports reintroducing tax credits for Britons investing domestically — a scheme that existed until 2016.

The Confederation of British Industry, a prominent business lobbying group, has echoed these concerns, calling for urgent action to halt the exodus of firms from the London Stock Exchange. The CBI has argued that lighter regulation, better marketing of the UK market, and incentives for investors are all needed to stem the outflow.

The government has declined to confirm whether stock market reform will feature in its Budget this month. A spokesman said that, as has always been the case, decisions on tax are a matter for the chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.

The debate over London's competitiveness comes at a critical moment for the UK economy, which has struggled with sluggish growth and weak business investment. The departure of major companies not only reduces the tax base but also diminishes the depth and liquidity of the London market, potentially making it less attractive to future listings.

Dame Julia's intervention is notable because it places the chief executive of the UK's most prominent stock exchange at the centre of a national conversation about economic strategy. Her call for "structural incentives" suggests that piecemeal reforms may not be enough to restore London's appeal.

The LSE's chief also highlighted the paradox of British capital flowing abroad while domestic companies struggle to attract investment at home. This dynamic, she argues, undermines the government's stated ambition to spread growth across the country.

For now, the question of whether the UK will adopt the measures Dame Julia proposes remains open. What is clear is that the London Stock Exchange faces intensifying competition from New York and other global financial hubs, and the pressure to adapt is mounting.

The outcome of this debate will have significant implications not just for the City of London but for the wider UK economy, affecting everything from pension funds and savings to job creation and tax revenues. As Dame Julia's comments make clear, the stakes could hardly be higher.