Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The UK chancellor will on Tuesday intensify her push to persuade tech firms and investors that the country is an attractive listing venue as the Treasury considers new measures to encourage companies to float in London.
Rachel Reeves is due to attend JPMorgan’s “Tech Stars” event in London as the Treasury examines ways to make listing in London more attractive, including granting tax relief to entrepreneurs on proceeds from a flotation, according to three people familiar with the discussions.
Officials are also discussing the option of giving tax relief on the costs of an initial public offering, with conditions being set on the firm and founder remaining in the UK for a defined period, the people added.
Reeves is also set to introduce a stamp duty holiday for new London listings in the hope that it would encourage more investors to back UK shares and companies to list in London, the Financial Times reported last week.
“The chancellor is open and listening to ideas but no decisions have been made,” a person familiar with discussions said.
The event at JPMorgan, scheduled to include a conversation between Reeves and the bank’s chief executive Jamie Dimon, comes a day after the chancellor joined a meeting hosted by Goldman Sachs for potential IPO candidates such as OakNorth and Starling.
Invitees to the two-day gathering include Revolut chair Martin Gilbert and representatives of card reader company SumUp, digital lender Monzo, fintech Cleo, trading platform OLX, listing hopeful loveholidays and data analytics firm Quantexa.
Former Arsenal football star Thierry Henry, who has invested in multiple tech firms, is also scheduled to speak.
It comes as the UK attempts to overcome a three-year listings drought that has led to London falling out of the world’s top 20 listing markets in the first nine months of this year.
Steven Fine, chief executive of Peel Hunt, said tax relief on IPO costs would be a big boost in encouraging UK listings. Such a measure would be of limited value to huge companies but would be a big help to smaller businesses, which face £5mn of costs when raising £50-100mn, he said.
“These incentives would make every founder think twice about going to the US,” he said.
The chancellor’s sales pitch to investors is expected to include highlighting the UK’s trade deals, interest rate cuts and her move to cut red tape.
The risk of London losing its status as a global financial hub has been exacerbated by AstraZeneca’s move last month to elevate its US shares, which will lead to a £170-200mn hit to the Treasury from missed stamp duty.
A Treasury spokesman said: “The chancellor is focused on making the UK the best place for businesses to invest and attracting the most innovative companies to start, scale, list and stay here, and the FTSE 100 continues to trade close to an all-time high.
“By continuing to remove barriers to investment, we’re delivering our plan for change so that our businesses succeed and our economy grows”.
Attendees at the event hosted by Goldman on Monday, first reported by Sky News, said it had been “positive and constructive” and that incentives for listings had been discussed as well as the need to end a vicious circle of negativity around the London stock exchange.
The London Stock Exchange has had a welcome boost from the recent listing plans of canned food group Princes, lender Shawbrook and Beauty Tech, which makes beauty devices that can be used at home.
“You can see all the IPO announcements come through and see the doom loop starting to close — now is the time to up the ante”, said Mark Austin, partner at Latham & Watkins and part of the Capital and Markets Industry Taskforce.
