The leaders of City stockbroker Cavendish recently said ministers should consider tax breaks for entrepreneurs to give the London Stock Exchange a clear edge over private equity.
Cavendish co-chief executives John Farrugia and Julian Morse suggested the Government could also cut corporation tax for pension funds which were investing a minimum amount of their assets into UK companies.
Sir John said propelling more pension funds into the UK market would be a “straightforward” solution. “Pension funds get a massive tax benefit from the Government, and the Government needs to do a bit of trading for that tax benefit.
“It needs to say, ‘we don’t want you to be all invested in gilts – we want you to be invested in a much more diverse set of assets that would allow us to build the economy. And ideally, some percentage of that should be in the UK’.”
Other life science chiefs have, however, signalled that there are broader issues which need to be addressed before the London markets can convince companies to either stay listed or to join.
Clive Dix, chief executive of C4X Discovery, said: “Money on its own isn’t the problem. The problem is that there aren’t sophisticated healthcare funds and analysts that analyse the sector here either.”
Mr Dix said without more of those people and infrastructure in place “how is the money going to get into those companies in a sophisticated way?”
It is a view which has been echoed by others in recent years, as some of Britain’s most promising biotech companies have opted to list in the US. Covid vaccine company Vaccitech made its market debut in New York in early 2021.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
