LSE-led taskforce urges pension tax breaks in pre-Budget plan to revive London listings

Every demand in the reported package is aimed at the buyers of UK shares: the pension funds and ISA savers whose money would be pulled toward London listings ^[4][5][6]. The largest is the dividend credit. The taskforce says it could mobilise as much as £125bn in equity by 2042 ^[6]. Cmit is led by London Stock Exchange chief executive Dame Julia Hoggett, and it says the package would bring more new listings and stop start-ups being lost to markets such as the US ^[1][13]. All of the reported demands are tax measures, and the account published so far does not mention listing rules ^[4][5][6].

The bill comes out of a tax the group has already accepted it cannot touch. Cmit acknowledged that Healey is unlikely to abolish stamp duty on shares because it raises £3bn a year ^[4]. At its £742m cap, the dividend credit would cost each year about a quarter of what stamp duty brings in ^[14]. Mark Austin, a capital markets lawyer and Cmit member, told the Sunday Times the ideas would "mobilise long-term domestic capital into UK companies, while respecting a fiscally constrained environment and keeping cost capped, design choices voluntary and fiduciary duties intact" ^[8].

Cmit expected one objection: that pension money would be pushed into UK shares by order. The group tried to head off that fear ^[5], and Austin's line about voluntary design and fiduciary duties is its answer ^[8]. We think the answer holds, but it costs speed. Trustees can turn down a voluntary incentive, so the money moves slowly. The group's own target date is 2042 ^[6].

The urgency in the document comes from companies that are already leaving. City leaders warned that the exodus of British start-ups is "not business as usual" ^[12]. Cmit cited the £24bn sale of Arm to SoftBank as an example of a shrinking IPO pipeline ^[7]. According to the Sunday Times, the submission is understood to say: "The UK is at a serious risk of becoming forever an incubator nation, exporting its greatest companies just at the point they become globally consequential" ^[3]. Andrea Rossi, chief executive of M&G, wrote in the same paper that the "decline of London's stock market" is a "problem for Britain" ^[10].

For a founder or board choosing where to float, the proposals and the decision run on different timescales. If Healey grants the requests, they would add domestic demand for UK shares over a period running to 2042 ^[6]. A company that lists this year lists into the market as it stands. We do not know yet which of the measures, if any, will be in the Budget. A board that holds a US decision until the Budget will lose a few months. In return it gets a better view of who is likely to be buying London shares between now and 2042 ^[6].