LSE Chief: Scrap 0.5% Stamp Tax to Keep UK Firms at Home

London's stock market hosted just 23 IPOs last year, raising £2.1bn, while US markets saw 354 listings that pulled in $44bn (£33bn). Dame Julia Hoggett, chief executive of the London Stock Exchange, says the UK government must act now or keep watching its biggest companies leave for New York, Frankfurt and Amsterdam.

"If we want Britain to back Britain, which is what I hear the chancellor and the prime minister saying, then let's make sure that we're creating structural incentives to do so," Hoggett told the BBC's Big Boss podcast, published 24 April. "We need to take the handbrake off."

What is happening to the London market?

The LSE's main market counts roughly 930 companies with a combined market value of about £4.9 trillion. Almost 40% of them are international businesses from more than 80 countries.

Yet scores of large firms have delisted, moved away or been bought by foreign private investors in recent years. The departures include:

• Just Eat — the takeaway chain switched its listing to the Amsterdam stock exchange
• Tui — the travel giant opted for Frankfurt
• Flutter — the Paddy Power owner now trades in New York

New listings have dwindled at the same time. The concern is that the exodus weakens the UK economy by cutting tax revenues and depressing business valuations.

Why does Hoggett want tax changes?

Hoggett wants the government to scrap the 0.5% tax Britons pay when they purchase UK shares. She points out that no such tax applies when they buy foreign stocks. She also backs tax credits for people investing domestically — a scheme the UK had until 2016.

British money is already flowing west. Hoggett noted a big rise in UK investment moving into US stocks in search of better returns.

"We talk as a nation about wanting growth in every postcode, but at the moment, a lot of us are funding growth in every zip code," she said.

What is behind the negative sentiment?

Hoggett argued there is "no shortage of great companies and no shortage of capital" in the UK. In her view, exaggerated negative sentiment about the UK market has contributed to companies leaving.

"We need to stop throwing shade at ourselves as a nation... it's a national habit," she said.

She called on the government to make it "more attractive" to invest in the UK stock market. Without structural incentives, she warned, big firms will continue to look overseas for their next stage of growth.

What are businesses demanding?

The Confederation of British Industry, the UK's business lobbying group, has called for urgent action to halt the exodus from the London Stock Exchange. It says stemming the outflow requires:

• lighter regulation
• better marketing of the UK market
• incentives for investors

The government declined to say whether stock market reform would appear in the Budget this month. "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," a spokesman said.

The chancellor's Budget this month is the next test of whether Hoggett's call for structural incentives — from stamp duty abolition to investor tax credits — gets a hearing.