Importance Score: 82 / 100 🟢
Concerns Grow Over UK Company Exodus as Peel Hunt CEO Urges Action
The head of Peel Hunt, a prominent City brokerage, has issued a stark warning regarding the increasing departure of businesses from Britain, emphasizing the urgent need for measures to revitalize the UK stock market and bolster the broader economy. Steven Fine, Chief Executive Officer of Peel Hunt, advocated for the implementation of tax incentives aimed at entrepreneurs and investors to stimulate economic expansion. He stressed that a fundamental shift in attitude is required, urging Britain to “celebrate success and people earning a few bob” to foster a more encouraging environment for business growth and investment in the UK financial markets.
Alarming Rate of Companies Leaving London Market
In a recent report, Peel Hunt highlighted the significant impact of foreign company acquisitions and a decline in initial public offerings (IPOs) on the London market. The report suggests this trend is contributing to a weakening of the UK’s public markets and overall economic health.
“Losing Companies Hand Over Fist” – CEO’s Warning
Fine expressed serious concern about the current situation, stating, “You’re losing companies hand over fist, you are losing companies at an alarming rate from the public markets.” This outflow of businesses, he argues, is detrimental to the long-term prospects of the UK economy.
Budget Disappointment and Entrepreneurial Spirit
According to Fine, there was considerable apprehension in the lead-up to the autumn Budget, followed by “frustration and angst” after its announcement. He believes that historical attitudes in Britain have been overly critical of entrepreneurs. He argued for a change in perspective: “But if you want to stimulate growth, we’re going to have to celebrate success and people earning a few bob.”
Call for Policy Changes to Boost Investment
Reviving Entrepreneurs Relief
Fine proposed the reinstatement of entrepreneurs relief, a policy that previously allowed business founders to benefit from a reduced rate of capital gains tax upon selling their ventures. While acknowledging it has been scaled back, he suggested its revival, potentially linked to companies undertaking an IPO, to incentivize listings on the London Stock Exchange.
Restoring Dividend Tax Credits
Furthermore, Fine advocated for the reintroduction of dividend tax credits for pension funds, which were eliminated in 1997. He contended that this measure, at a modest cost of “a few hundred million pounds,” would provide a significant incentive for retirement schemes to increase their allocations to UK equities, thereby injecting much-needed capital into the British stock market.
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