City minister: This Labour Budget will strengthen capital markets
This Budget introduces reforms to strengthen the UK’s capital markets, notably with the new UK Listing Relief to abolish Stamp Duty Reserve Tax for three years after listing, and ISA reform to boost retail investment, all aimed at fostering a long-term, modern economy that supports British companies and savers, says Lucy Rigby
This government is ambitious for Britain and ambitious for the British people.
Over the past year I’ve spoken to founders, investors and market leaders across the country, and the message has been clear: the UK has huge strengths – but we need to make it easier for great British companies to scale here, list here and succeed here.
This Budget delivers exactly that. It strengthens the UK’s position as one of the world’s most competitive places to raise capital and ensures that the growth created in our markets delivers real benefits for working people and long-term savers.
Our capital markets already have enormous strengths. Last year, UK exchanges raised more equity capital than the next three European exchanges combined. The FTSE hit record highs. Global firms continue to choose Britain because of our depth, our expertise and our rule of law. But staying ahead means constantly improving our offer – and that is what the reforms in this Budget do.
The centrepiece is the new UK Listing Relief. For the first three years after a company lists in the UK, investors in its shares will no longer pay Stamp Duty Reserve Tax. It’s a targeted, pro-competitiveness change that boosts liquidity, supports higher valuations and gives scaling firms a compelling reason to choose a UK listing. It’s also an international first – and it sends a clear signal: if you want to grow, raise capital and build a global company, Britain is open for business.
But listings reform is only part of the story. To have strong public markets, you need a strong pipeline of firms coming through – and a retail investment environment that lets people share in the value those firms create.
ISA Reform
That’s why ISA reform matters. The UK has the lowest level of retail investment in the G7, with fewer than one in ten adults owning shares and investing largely the preserve of the wealthy few. But it wasn’t always like this: back in 1990, about one in five people owned shares.
By the Stocks & Shares ISA at £20,000 – we are encouraging long-term investment and giving people better routes to grow their savings. That builds on the measures outlined by the Chancellor in July to provide people with the information and support to start investing, and firms have committed to providing simple, navigable ways for savers to find UK opportunities that suit them.
We expect around £3bn of fresh retail investment as a result. That means more capital flowing into British companies, boosting innovation and productivity, while helping savers strengthen their financial resilience.
Alongside this sits a major package to support entrepreneurs and scale-ups. Britain is one of the best places in the world to start a company. But too many promising businesses struggle to raise later-stage capital – and some end up going abroad just when they’re ready to break through. We’re fixing that.
We’re doubling the generosity of key enterprise tax incentives so high-growth firms can attract the talent and investment they need. We’re expanding employee share schemes so more workers can benefit directly when the companies they help build succeed. And through the British Business Bank’s new five-year plan – backed by a record capital injection – we’re directing billions towards the UK’s most exciting scale-ups, with a clear focus on science, technology and the industries of the future.
This is about building a long-term, modern economy where innovators choose to grow in Britain because the environment here is the most attractive in the world – from the first investment round right through to IPO and beyond.
Better capital markets mean more investment, more innovation and more high-quality jobs across the country. They mean stronger pensions and brighter prospects for savers. And they mean a UK economy that delivers sustainable, broad-based growth.
This Budget is another step towards that goal – and towards a country that backs ambition, rewards success, and gives every part of the UK a stake in the next generation of British growth.
Lucy Rigby is City Minister