Labour will get more businesses listing in Britain
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As Labour’s Shadow Chancellor Rachel Reeves visits the New York
Stock Exchange, she sets out how the party will look to get more
businesses listing in Britain. And she accuses government of
wasting Britain’s potential saying that while it “used to just be
the French eating our lunch” on business investment, now “the
Canadians and Australians are eating our dinner, and the Americans
are having our dessert.” Pointing to the “huge promise and
potential” of...Request free trial
As Labour’s Shadow Chancellor Rachel Reeves visits the New York Stock Exchange, she sets out how the party will look to get more businesses listing in Britain. And she accuses government of wasting Britain’s potential saying that while it “used to just be the French eating our lunch” on business investment, now “the Canadians and Australians are eating our dinner, and the Americans are having our dessert.” Pointing to the “huge promise and potential” of British businesses, start-ups and entrepreneurs, she will say that their lack of access to capital is holding them back and is a symbol of wider malaise under the Tories when it comes to investment in the UK economy. It comes as Labour reveal new figures showing how the amount of money raised at IPO has fallen dramatically by 84% in the last 5 years, to £1.6bn in 2022 from £9.4bn in 2017. That means British firms are either having to go abroad to raise money or are simply not able to raise money through equity to invest in growing. In 2022, 71% of all funding into UK growth companies came from overseas investors, frequently pension funds. Reeves claims that this is part of a pattern that means “you're more likely these days to own a share in British infrastructure if you're a Canadian teacher.” Pointing to Labour leader Keir Starmer’s mission to secure the highest sustained growth in the G7, Reeves said “we won’t achieve that if we just sit back and watch other countries steal a march on us. We used to be competitive. Labour will make sure we can be again.” The party also pointed to some of the high profile businesses leaving the country, including ARM holdings, a UK tech success story, which is set to float in New York rather than London; and, earlier this year, CRH, the building materials group, said it planned to move its primary stock market listing to the US. Reeves points to a lack of growth capital being invested in UK public markets as a big driver of companies listing abroad – and says the Labour party planned to change that culture by removing certain barriers for funds to do so. One immediate way the party will start that culture shift is by setting up a framework that will allow insurers and pensions funds to invest alongside the British Business Bank, derisking investments and making it easier for liquidity providers to invest in this type of growth investment. Defined Benefit pension schemes in the UK, for example, hold around £2 trillion of assets, and DC schemes around a further £500bn so mobilising even a fraction of this into growth could provide a hugely significant source of growth capital for UK companies. For example, 5% of this could mean over £100bn of extra investment in growing UK companies. This would be the first step, Reeves claims, in changing the direction of travel of high potential firms and entrepreneurs leaving Britain to list abroad.
Reeves is also urging the government to “get a move on” on
changing that culture, saying the Tories have announced multiple
times that they are going to unlock pension fund investment but
have taken no concrete actions. Speaking about the plans, Labour’s Shadow Chancellor Rachel Reeves said: “Britain has huge potential and promise. “Nowhere do I see that more than with our brilliant British businesses that I visit across our country. “But a lack of confidence in Britain’s economy has led to too many businesses leaving our shores. It used to just be the French eating our lunch on business investment, but now the Canadians and Australians are eating our dinner, and the Americans are having our dessert. “You're more likely these days to own a share in British infrastructure if you're a Canadian teacher.” “I am determined to learn in the US how we unlock more of our talent and skill, because I know our economy is falling behind when it doesn’t need to. “Our businesses play a crucial role in helping us meet our mission of securing the highest sustained growth in the G7. We won’t achieve that if we just sit back and watch other countries steal a march on us. We used to be competitive. Labour will make sure we can be again. “Labour will make Britain the best place to start and grow a business – and end the global investment malaise that has gripped our country for far too long under the Tories.” Ends Notes
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