Wise’s London listing snub shows the need for urgent City reform
The loss of the primary listing of the fin tech Wise from London is another body blow to those seeking to reboot its fortunes as the international market where the best ideas find the best capital, writes shadow business secretary Andrew Griffith.
Coming on the eve of London Tech Week it’s a real downer and a sign of a vibe shift which risks London becoming a ‘flyover state’ as talent and money heads instead to cities such as Paris, Abu Dhabi and Riyadh.
The worry is that Wise is just one example of a broader malaise. Labour’s attacks on business and investors are turning London into hostile territory for wealth creators, just as Sadiq Khan’s refusal to police our streets or the underground is making them think twice about their families living in the capital. What was once the financial epicentre of the world and a safe, high trust place to live is becoming a high tax, high crime horror-show.
Actions have consequences, and since Labour took office over £140bn in London listings has been cancelled, relocated, or otherwise lost to exchanges elsewhere. This comes at a cost. Our financial sector accounts for almost 10 per cent of our GDP — no growth strategy is credible without it.
Of course any listed company will have stock specific factors and under any government companies can come and go. But there is a sense of all the news now being in one direction and the turnaround in fortunes from a cross-party financial reform agenda now stalling.
When first elected this government had the chance to set out Londons stall as a beacon of stability when other markets seemed more volatile but this was squandered by the Chancellor initially trash talking the economy followed by the actual self harm of raising taxes, raising spending and fiddling the fiscal rules. In particular, the changes to the taxation of international investors has seen millionaires fleeing the UK at a rate of one every 45 minutes and – by some estimates – fully ten percent of non domiciled investors having already left. Amongst them Guillaume Pousez, the checkout.com founder, sending a signal to other tech entrepreneurs who tend to cluster together.
Whilst some write off London, in my view as former City Minister it is still fixable but the government would have to get a grip and fast.
That would involve a further push on regulatory culture, more openness to cryptocurrencies, encouragement for retail investors, pushing back on ESG burdens and looking again at disincentives like stamp duty on shares.
The Pensions Bill published yesterday could be a golden opportunity. Instead of wasting time and energy on mandating (Labour spending your retirement savings for you!), it must tackle the deep seated regulatory culture of risk aversion which sees far too much investment in low return gilts rather than growth shares such as the very companies moving their listings overseas. Of course, this shift to higher return assets would be easier for the government to embrace if they weren’t themselves conflicted by having to sell gilts in order to fund their profligate public sector spending spree.
I have consistently advocated for reforming the City to encourage more risk-taking and innovation. But instead of seizing that opportunity, all we have seen from the Chancellor is the opposite. Delay and government by announcement have become the mode du jour. It took months to appoint an investment minister and the Office for Investment is continually re-announced without its gears ever seeming to get out of neutral. Almost one year in there’s still no industrial strategy, and the few actions they have taken were in the wrong direction like cancelling the UK’s exascale supercomputer.
Under new management we Conservatives have a positive vision for Britain’s businesses where we can drive growth and rip out the regulations that throttle or slow innovation and investment. A whole rewiring of the state, the economy and the regulations that underpin them. Whilst other parties compete about who can spend more, we will create a country based on living within our means through hard choices and where everyone can ignite the spark of ambition.