Speaker 1: David's big year for elections across the world, and also
Speaker 1: there is one here in the UK.
Speaker 2: The polls seem to be narrying though turn on with labor,
Speaker 2: maybe it's not going to be as massive a landslide
Speaker 2: the laborers as we were thinking, and.
Speaker 1: Then has all sorts of implications. Now the City of
Speaker 1: London is also trying to figure out now what they've
Speaker 1: gained from fourteen years of Conservative leadership and what.
Speaker 2: Might happen if we're do in you get a change
Speaker 2: of administration in the coming months.
Speaker 1: Welcome to In the City, Bloomberg's podcast, connecting you to
Speaker 1: the conversations and the stories shaping the world of finance.
Speaker 2: I'm David Merritt and I'm Fronci lack One and this
Speaker 2: week we have with us Miles sell It, the chief
Speaker 2: executive officer at the City UK. That's the trade body
Speaker 2: which represents financial professional services here in the UK.
Speaker 1: Miles, thank you for joining us, Thanks very much for
Speaker 1: inviting me. I mean, this is a big year for
Speaker 1: UK business as they try and figure out what a
Speaker 1: possible labor government means for them. How have the Tories
Speaker 1: done so far?
Speaker 3: The Tories clearly are struggling the polls. We had a
Speaker 3: dinner with some Conservative candidates last night. I think they
Speaker 3: were determined. You know, they followed the mooded well, determined.
Speaker 3: They felt that the mood in their patch was you know,
Speaker 3: it was not reflective of where the polls were, but
Speaker 3: you know, or well, I mean, it was certainly not
Speaker 3: for me to just determine whether or not they're own
Speaker 3: denial or not. But there was a sense of, look,
Speaker 3: they've got a you know, they've got a tough mountain
Speaker 3: to climb, but they are clearly on the in Westminster
Speaker 3: and Whitehall and in the constituencies. They are moving towards
Speaker 3: election mode. They're moving towards knocking on doors. From our
Speaker 3: point of view in industry, really whoever wins the next
Speaker 3: general election. From the point of view of financial and
Speaker 3: professional services, there's a lot of continuity about That was
Speaker 3: one of the big things that Labor pushed at their
Speaker 3: recent business conference. There's a lot of consistency in policy
Speaker 3: and certainly what we're hearing from international investors. I was
Speaker 3: in Hong Kong and Shanghai a couple of weeks ago
Speaker 3: is is actually there's it seems to be pretty much
Speaker 3: business as usual from the point of view of sort
Speaker 3: of macro policy in this kind of space.
Speaker 2: I mean, all the wobbles this week with labor polls
Speaker 2: narrowed quite a bit, I do wonder a little bit
Speaker 2: at how much of this really breaks through. I'm a
Speaker 2: little bit more uncertain.
Speaker 3: I don't know, as I say, at the stinner with
Speaker 3: the Tory PPCs. The start of it was all, you know,
Speaker 3: it's all right on my patch, that doesn't fit with
Speaker 3: the polls. By the end of it was a slightly different, Yeah,
Speaker 3: slightly different equation. I think they're expecting quite a few
Speaker 3: of them are expecting a bit of a battery.
Speaker 2: If we get But the landslide scenario is well, that's okay,
Speaker 2: we flip to labor, but at least it's secure and stable.
Speaker 2: But there's another outcome potentially, which is it's a bit
Speaker 2: closer and we have a hung parliament.
Speaker 3: This is the thing that worries industry and investors, which
Speaker 3: is that if you end up with a narrow labor majority,
Speaker 3: or no majority at all, or maybe king makers, you're
Speaker 3: back to the political risk and the political instability. So
Speaker 3: if there is going to be a decision, I think
Speaker 3: certainly the members we speak who would rather that it
Speaker 3: was a decisive result. So you end up with Labor
Speaker 3: with fifty sixty or more in a majority, or if
Speaker 3: it's the Tories with fifty or sixty more. But that
Speaker 3: doesn't look likely. So it's much much better to have consistency,
Speaker 3: clarity and a direction of travel. And as I say, genuinely,
Speaker 3: most of the people we speak to don't see that
Speaker 3: much of a difference in the big picture stuff. Carrie
Speaker 3: will be there to a certain degree. We'll see how
Speaker 3: that happens. The non dom things will be there to
Speaker 3: a certain degree. We'll see how that plays through.
Speaker 2: But prival private school fees, you know what, private.
Speaker 3: School fees get so much cut through. So genuinely, I
Speaker 3: was talking to this businessman in Hong Kong who sent
Speaker 3: his kids to UK private schools and then UK universities,
Speaker 3: and he said, you guys are getting complacent because this
Speaker 3: is substantially increasing the cost. So it would would have
Speaker 3: made me think twice, he said about sending the kids
Speaker 3: to a private school. So now I think that one's
Speaker 3: going to get more I think more difficult.
Speaker 2: It's the one policy that Rachel they're sticking. I mean
Speaker 2: they talk about it all the time, because obviously it
Speaker 2: has political cut through, yes, and domestically and fiscally, it's
Speaker 2: not going to make a huge amount of difference, yeah,
Speaker 2: but it won't be.
Speaker 3: As huge, won't be making what I can't see that
Speaker 3: makes a huge amount of money. I suspect you end
Speaker 3: up with a bunch of people dropping out of dropping
Speaker 3: their kids out of the private schools, the ones you'll
Speaker 3: throw on the edge of afford of But it doesn't
Speaker 3: raise a life changing amount of money from a government's perspective.
Speaker 3: But I think it does have a potential impact just
Speaker 3: from the conversations we've had at least with some people
Speaker 3: in terms of how they look at the UK, and
Speaker 3: I think that sort of sense of the political driver
Speaker 3: on that being it's one of those things that plays
Speaker 3: well to the labor base, but also plays well to
Speaker 3: the sense that people at the upper end of the
Speaker 3: income scale have done very well over recent years and
Speaker 3: if there are going to be tax changes over the
Speaker 3: coming years, I suspect the polling would show that they
Speaker 3: support that lands on those with a ship with the
Speaker 3: broader shoulders.
Speaker 1: I guess the question is we don't really have the
Speaker 1: policies right in terms of corporate taxation from labor. Yet
Speaker 1: we don't really know what they do with carried interest.
Speaker 1: So at the moment there's been a big push and
Speaker 1: we've seen that through all of our reporting day that
Speaker 1: their labor wants to woo business without giving too much details.
Speaker 2: Yeah, it's a bit thin, isn't it.
Speaker 3: I thought the Business conference was interesting, so I think
Speaker 3: the big headline from that was Rachel Reeves's commitment corporation tax.
Speaker 3: So she said headline rate will remain at twenty five
Speaker 3: percent and they're going to go for the stability piece.
Speaker 3: One of the things we've been saying to government and
Speaker 3: to the opposition for a while is actually when George
Speaker 3: Osborne was Chancelly, he had this commitment that the UK
Speaker 3: would always be in the bottom quartile of the G
Speaker 3: eight on corporation tax and that just helped with tax planning.
Speaker 3: You kind of knew which direction things were going in.
Speaker 3: It just made life a little bit easier in terms
Speaker 3: of anticipation. But the reality is you've got debt at
Speaker 3: high levels. Although I think sometimes the UK story is
Speaker 3: slightly overdone. I think we are the second lowest debt
Speaker 3: GDP ratio in the G seven, but it's clearly pretty
Speaker 3: high by historical standards. There's whoever wins the next general election,
Speaker 3: there's going to be a demand to invest in infrastructure,
Speaker 3: in public services, so health, in schools. There's the need
Speaker 3: to re arm which seems to be a cross party basis.
Speaker 3: And this isn't just something that we're seeing in the UK,
Speaker 3: this is across the West. So what gives There's not
Speaker 3: much room really to increase debt. They seem to have
Speaker 3: closed off increases in taxation. Our senses there will be
Speaker 3: a dash for growth and that certainly seems to be
Speaker 3: the approach that Labour's taking. I suspect that will be
Speaker 3: what the Tories will have to go for as well,
Speaker 3: and that brings it industries like ours into play. So
Speaker 3: what can you do in terms of unlocking the investment
Speaker 3: that potentially sits in the private sector on things like
Speaker 3: green finance and the shift to net zero, but also
Speaker 3: potentially on driving things such as reinvestment and infrastructure and elsewhere.
Speaker 2: So there's not much space, is that? I mean you
Speaker 2: talked about the pro going for greath We can't slash
Speaker 2: taxes and ramp up spending in those ways. So there's
Speaker 2: not much in it, is there? Yeah?
Speaker 3: I mean, what one thing I'd say is, and full
Speaker 3: credit to the Prime Minister and the Chancellor. I think
Speaker 3: they have to a certain degree, to a very large degree,
Speaker 3: sort of reclaimed the UK's reputation for stability. And you know,
Speaker 3: one of the things the UK is sort of historically
Speaker 3: had is this sort of sense of you know, we're
Speaker 3: a bit boring and predictable and you'll get a slight, yeah,
Speaker 3: slightly better return here than elsewhere.
Speaker 2: And they call it the more on premium. That was it, yea,
Speaker 2: And many talks to people in Singapore, I mean, do
Speaker 2: you think the more the more on premium is gone.
Speaker 3: I think there is definitely a that the UK is
Speaker 3: back into a more stable, more predictable place. And I
Speaker 3: think it's also it's not just what happened over that summer,
Speaker 3: that sort of quasi qua tengles trust summer. There is
Speaker 3: no getting away from the fact that Brexit created a
Speaker 3: space where the UK was seen as politically, you know,
Speaker 3: much too exciting and unpredictable. You then had the twenty
Speaker 3: seventeen general election, which brought the possibility of a Corbin
Speaker 3: government into play. You could even go further back and
Speaker 3: say you look at twenty fourteen in the Scottish independence referendum.
Speaker 3: The UK has been historically unusually politically interesting. We did
Speaker 3: a dinner with some Italian counterparts a couple of years ago,
Speaker 3: and at the end of the dinner, one of the
Speaker 3: Italians stood up and he said, I'd like to propose
Speaker 3: a toast of thanks to our British friends for swapping
Speaker 3: their politics with ours.
Speaker 2: And it was the economist. Did that covered the upset.
Speaker 1: Upset all Italians.
Speaker 2: And I think everyone's.
Speaker 1: I'm sorry you don't have you know, as good as
Speaker 1: pastors or the weather Franklinbridge. But I guess the question
Speaker 1: is when you look at the numbers, if you look
Speaker 1: at what happened to servicing debt pre COVID and then
Speaker 1: because of inflation, I think debt servicing costs are about
Speaker 1: fifty billion pounds higher than pre pandemic days. So to
Speaker 1: your point, I don't see how any party can actually
Speaker 1: cut taxes unless you go into austerity again.
Speaker 3: Yeah, I think it's very difficult to see where tax
Speaker 3: cuts come from, and certainly I don't think that growth
Speaker 3: can only be driven by tax cuts. In any case,
Speaker 3: I think what's interesting is actually if you look at
Speaker 3: the United States, where you've had the Chips Act and
Speaker 3: you had the Inflation Reduction Act. You know, the US
Speaker 3: is going gangbusters in terms of economic growth at the moment,
Speaker 3: and that is a very active utilization of the state.
Speaker 3: And it was the same in many ways, actually, ironically
Speaker 3: enough under Trump, very similar approach under.
Speaker 2: We can't do that here, can we. And we've just
Speaker 2: seen this with labor having to row back their green
Speaker 2: spending because sums don't add up here. We can't you know,
Speaker 2: we're not the United States. We can't lurge the cash.
Speaker 3: Although whenever we raise this government government makes the point
Speaker 3: that if you look at the overall level of subsidies
Speaker 3: and support across the piece on green that actually it's
Speaker 3: a comparable amount of GDP. Now that's fine, but it's
Speaker 3: a GDP of two point eight trillion versus a GDP
Speaker 3: of nearly ten times that, so the impact is different.
Speaker 3: That's also had an impact on capital markets. It's sort
Speaker 3: of dragged a huge amount of investment into the US
Speaker 3: and a huge amount of business into the US. But
Speaker 3: I think there is this point about the role of
Speaker 3: the state as we move forward. We were talking to
Speaker 3: one of the people advising labor a little while ago,
Speaker 3: and he said we're moving towards something that he termed
Speaker 3: the fourth Way. So we've kind of had Tony Blair's
Speaker 3: Third Way, and he I don't think this is a
Speaker 3: sort of trademark Keir Starmer moment where he put it
Speaker 3: was that this is the fourth way, which is an
Speaker 3: active interventionist state working in partnership with dynamic free markets.
Speaker 2: They've just dialed it back. I mean, were you disappointed
Speaker 2: to see that ambition scaled back?
Speaker 3: So? I think I think that was a very sensible approach,
Speaker 3: that it was the boring approach. Rachel Reeves turned around
Speaker 3: and said, we made this commitment under a different set
Speaker 3: of circumstances to your point, France, seeing the debt servicing
Speaker 3: levels were very different, where therefore having to look at
Speaker 3: what we do in terms of how we move forward.
Speaker 3: I don't think that there is a reduction in the
Speaker 3: commitment to net zero from that. I think it's just
Speaker 3: they're looking at how they do that in different ways
Speaker 3: comes work. But I think it also therefore points to
Speaker 3: what do you do in terms of blended finance. You know,
Speaker 3: I was at COP twenty eight in November, as I'm
Speaker 3: sure you guys were One of the big things that
Speaker 3: came out of that discussion was how do you utilize
Speaker 3: how do you harness the private sector in service of
Speaker 3: driving green and sustainable finance, the move to net zero adaptation,
Speaker 3: et cetera.
Speaker 1: But isn't there a bigger concern here of what the
Speaker 1: city of London becomes? So you know, at your annual
Speaker 1: dinner the chanswer was saying, well, the UK and actually
Speaker 1: the City of London needs to become the next Nasdak.
Speaker 1: We're going to focus on technology. I mean, he may
Speaker 1: not be transfer for much longer. I don't know whether
Speaker 1: technology and green bond is going to be the thing
Speaker 1: that labor Wan to harness.
Speaker 3: So that's absolutely where I think we're heading towards. It
Speaker 3: is this sort of sense of a high tech economy
Speaker 3: based on high amounts of innovation that'll require, in our view,
Speaker 3: a different approach on regulation. So the regulatory approach historically
Speaker 3: on tech, on data, as before in migration and potentially
Speaker 3: on migration. We've got to be able to attract the
Speaker 3: best in the world here, and we've also got to
Speaker 3: be able to recruit from the best in from the
Speaker 3: best in the UK as well. So it's not just
Speaker 3: about bringing people in. It is about to use the
Speaker 3: term growing our own timber.
Speaker 2: Can we really compete though? Here? I mean it's good
Speaker 2: to hear the chance to talk about the focus on tech.
Speaker 2: We've been looking at the results we've been seeing from
Speaker 2: the tech for you know, the massive numbers coming out
Speaker 2: in the United States. And the one that really struck
Speaker 2: me was looking at arm which so doubled in price.
Speaker 2: Now this is a British company, British founded and chose
Speaker 2: to list in America and it's ripping the rewards now
Speaker 2: the share price. I think it's now worth something like
Speaker 2: one hundred and fifty or so billion dot it's one
Speaker 2: of the biggest capped companies now Britain. It chose to
Speaker 2: go and list in America. It made that decision. I mean,
Speaker 2: how can we capture the talent that's here, capture the
Speaker 2: potential and stop it flowing over it?
Speaker 3: So I'm a little more positive actually on that. So firstly,
Speaker 3: if you look at fintech, there are three major fintech
Speaker 3: industries globally, It's the US, It's China, It's the UK.
Speaker 3: It's the same with AI US China, UK. And if
Speaker 3: you look at the lead the UK's got in Europe,
Speaker 3: it's often way ahead most years in terms of investment,
Speaker 3: it's way ahead of France.
Speaker 1: Germany would push back against that.
Speaker 3: The French wood and you can point to certain surveys
Speaker 3: about the number of companies and technology and also the
Speaker 3: number of investments they've had, but the amount, the actual
Speaker 3: quantum that the UK continues to be ahead, and I
Speaker 3: think the UK is still a much more attractive place.
Speaker 3: It has the advantage of the university, so we are
Speaker 3: the second biggest number of top one hundred universities anywhere
Speaker 3: in the world, which for a country of fewer than
Speaker 3: seventy million people is still pretty impressive. You can look
Speaker 3: at the number of people who are coming in as
Speaker 3: foreign students. The UK continues to be a really attractive
Speaker 3: place to come as a foreign student, second only to
Speaker 3: the US and arguably in some ways ahead. So I
Speaker 3: think the talent piece is absolutely critical. You've raised a
Speaker 3: really important point on value. I think ARM is a
Speaker 3: fantastic success story. I mean full credit to the guys there,
Speaker 3: but actually if you look at UK companies that operate
Speaker 3: predominantly in the UK who list in the US, typically
Speaker 3: eighteen to twenty four months after initial listing, their valuation
Speaker 3: is below that of their American counterparts. So it's a
Speaker 3: more complex story than I think is sometimes pointed to males.
Speaker 1: What does the City of London financial Services actually want
Speaker 1: from labor right now? Is there a danger that if
Speaker 1: you know, a Chancellor and then a Prime Minister that
Speaker 1: understood hedge funds, that understood Wall Street couldn't get it right,
Speaker 1: that whoever comes next, you know, has even less of
Speaker 1: a chance.
Speaker 3: So I said, the first thing we wanted we'd got,
Speaker 3: which was continuity on the Financial Services Markets Act and
Speaker 3: the Edinburgh Reforms and the Mansion House reforms. And every
Speaker 3: time you know, we at City UK or our members
Speaker 3: see Rachel Reeves or Tulip Cidik or Darren Jones, they
Speaker 3: are at pains to stress. And their Financial Services Report
Speaker 3: that came out a couple of weeks ago said the
Speaker 3: same thing. This is about continuity on the Findinancial Services
Speaker 3: and Markets Act on a more specific basis for.
Speaker 1: Five years, right, That's what they pledged.
Speaker 3: So I think it was more that they will continue
Speaker 3: to push the reforms that have been set forward. I
Speaker 3: think that the key thing in terms of where the
Speaker 3: rubber hits the road on This isn't actually the legislation,
Speaker 3: it's the way that the regulators are now held to
Speaker 3: account on things such as the secondary objective on economic
Speaker 3: growth and competitiveness. So recently, the Sexual State for Business
Speaker 3: and Trade, Kemmy Badnock, had an exchange of letters with
Speaker 3: the new CEO of the Financial Reporting Council, Richard Moriarty,
Speaker 3: talking about how they both wanted to hardwire competitiveness into
Speaker 3: the way the FRC works. We thought that was a
Speaker 3: critical element in terms of the Financial Services and Markets Act,
Speaker 3: that the FCA and the PRA are held to account
Speaker 3: on how they implement that secondary objective, because otherwise it's
Speaker 3: just there on paper. It will always potentially fall by
Speaker 3: the wayside when something more urgent comes up. But if
Speaker 3: you're going to deal with the sort of things we
Speaker 3: were talking about earlier, which is economic growth, which is
Speaker 3: investment in public services, in preases, in defense spending, et cetera,
Speaker 3: et cetera, et cetera, and you're not increasing taxes and
Speaker 3: you're not increasing debt, the only way you get this
Speaker 3: is growth. And we are one of the you know,
Speaker 3: there's just no getting away from this. Isn't me you know,
Speaker 3: sort of waving the flag for financial services. It's just
Speaker 3: an economic reality. Our industry's got to be a critical
Speaker 3: part of delivering that nationally and at sort of regional
Speaker 3: level as well. So the KPI is the key performance
Speaker 3: indicators that have been put forward on that are the
Speaker 3: critical element. The government's doing some work on that at
Speaker 3: the moment. How labour then acts when they get in,
Speaker 3: the approach they take to those and the approach they
Speaker 3: take to the way that you incentivize risk and growth
Speaker 3: in the economy is going to be critical.
Speaker 2: Are there any specific measures that you can see down
Speaker 2: the pipe that are going to really help that. How
Speaker 2: can the capital markets really expand in this country? How
Speaker 2: can the liquidity levels deepen, How can there be more
Speaker 2: appetite for risk? And the London Stock Exchange reverse this
Speaker 2: decline it's been in terms of the size of its market.
Speaker 3: Yeah, and look, the sort of thing here is that
Speaker 3: you've got to make a different approach on risk and
Speaker 3: how that incentivizes growth. And one of the problems that
Speaker 3: we've got at the moment is that the regulator's fair
Speaker 3: play to the regulator. We have genuinely fantastic regulators here
Speaker 3: in the UK, but they are not incentivized to do
Speaker 3: anything other than prevent things from going wrong. So if
Speaker 3: you look at I'm probably not going to win myself
Speaker 3: for self any friends at the Treasury Select Committee on
Speaker 3: this one. This may be my first and last appearance
Speaker 3: on your podcast. So the you know where nikkil Ratty
Speaker 3: or Sam Woods go to the Treasury Select Committee. Typically
Speaker 3: the questions they get from the members of the Treasury
Speaker 3: Select Committee aren't what are you doing to drive competitiveness?
Speaker 3: They aren't what are you doing to drive growth? They
Speaker 3: are my constituents just lost two hundred and fifty quid
Speaker 3: on something, what are you going to do? In the
Speaker 3: subar Protect show, it's consumer and it's important, which is
Speaker 3: hugely important, and I am in no way denigrating that,
Speaker 3: but it is important that we strike the right balance
Speaker 3: between looking after consumers and the retail end of this
Speaker 3: and making sure that we are incentivizing and giving regulators
Speaker 3: the air cover to go in and actually drive growth.
Speaker 3: And I think Nikil gets and I think the team
Speaker 3: around him get it, but that is not always the
Speaker 3: lived experience, if you like, If I can use that
Speaker 3: term in terms of the supervisory visits and the enforcement
Speaker 3: visits that companies get from their data dating centervizing.
Speaker 1: I mean, is it through ices? Is it UK ices?
Speaker 2: I know we have the UK isis this came up
Speaker 2: at your events, didn't it? This idea that most countries
Speaker 2: would give a tax break to people to invest in
Speaker 2: funds that might actually invest back into the UK. Yeah.
Speaker 3: The Canadians are like the poster child on this. So
Speaker 3: the British er I think if we end up with
Speaker 3: something like a British icer, of which we would be
Speaker 3: hugely supportive, it could well be based on what they've
Speaker 3: done in Canada, which is exactly you say, there's a
Speaker 3: sort of different tax wrapper on those sorts of investments.
Speaker 3: And you've got to look also at what's happened in
Speaker 3: the UK. You touched on the sort of liquidity and
Speaker 3: the depth of the capital markets. If you look at
Speaker 3: the proportion of British household assets that are in equities,
Speaker 3: it's about eleven percent in the UK, In the US,
Speaker 3: it's north of forty In France and Germany, which aren't
Speaker 3: considered great sort of shareholding democracies of thirty. The UK
Speaker 3: has fallen behind on this. It's a point we've raised
Speaker 3: consistently and it's one of the reasons why you've got
Speaker 3: some companies looking at the UK and opening up in
Speaker 3: the UK from the point of view if there's an
Speaker 3: opportunity here, because it's at such a low base that
Speaker 3: you can sort of drive that forward. But absolutely, I
Speaker 3: think this is a potential opportunity.
Speaker 2: So the Chancellor's making good noises about it. It's a
Speaker 2: great column out on Bloomberg by merin Somerset. We're really
Speaker 2: advocating for this. But you I only have a few
Speaker 2: months left like me, So do you think that's something
Speaker 2: that you would see Rachel Reeves picking up on.
Speaker 1: I hope so.
Speaker 3: And one of the things that I think we've certainly
Speaker 3: seen in this space over a number of years now
Speaker 3: is and full credit to John Glenn who is the
Speaker 3: City Minister who took this forward that leaving the European Union,
Speaker 3: and I don't turn this into a backward looking conversation,
Speaker 3: but leaving the European Union did mean we had to
Speaker 3: look at everything almost from sort of first principles, in
Speaker 3: terms of how regulation worked, in terms of the systems
Speaker 3: that were in place, in terms of how we compared
Speaker 3: against other key markets. There were forty different consultations that
Speaker 3: John Glenn as City Minister took through. He worked very
Speaker 3: closely and kept his counterparts on the Labour side sort
Speaker 3: of cited on this. I think that's been done by
Speaker 3: his successors as well, so there is a degree of
Speaker 3: cross party consensus at least on the bigger pictures here.
Speaker 3: So I would very much hope that Rachel Reeves would
Speaker 3: take that forward. We would certainly urge Labor if they
Speaker 3: win the next general election to take that forward. We
Speaker 3: think it's a it's a sort of win win scenario
Speaker 3: from a whole range of areas.
Speaker 1: Can I talk about some of the numbers because Maren
Speaker 1: kind of laid it out in her column and that
Speaker 1: was really interesting. I mean she says, basically, the ISA
Speaker 1: cast the UK taxpayer around four billion pounds in tax
Speaker 1: revue for agune and of course there's no obligation for
Speaker 1: the recipients to have any incentives to invest back in
Speaker 1: the UK. I guess is the concern. I mean, this
Speaker 1: is a catch twenty two because you need growth for
Speaker 1: companies to get bigger in the UK. Because if you
Speaker 1: look at what's been doing really well for example on
Speaker 1: the foot seat, it's the oil majors and that's not
Speaker 1: a proper UK play what comes first, like the chicken
Speaker 1: or the eggs.
Speaker 3: So it's a tricky and this is the chan I
Speaker 3: think the answer the Chancellor gave you, you know, which
Speaker 3: was suitably delphic in terms of not giving away too
Speaker 3: much of his budget plans. But this is the point
Speaker 3: that he raised, you know. It is a complex picture.
Speaker 3: It has fiscal implications. I don't think it is a
Speaker 3: magic bullet. I think it is part of a set
Speaker 3: of solutions that we need to look at. So there's
Speaker 3: a huge amount of work that we've been doing. Stock
Speaker 3: Exchange have been doing UK Finance, the Banking Organization of
Speaker 3: Doing and others on how do you revitalize capital markets
Speaker 3: now in the UK and how do you revitalize listings
Speaker 3: in the UK now? Some of this is stuff that
Speaker 3: you can put in place and government is seeking to
Speaker 3: put in place through initiatives potentially like the British ISA.
Speaker 3: There are other things we could do. We think that
Speaker 3: looking at taxation, stamp duty would be well.
Speaker 2: Stock tradings have duty, yeah, yeah, which where the UK
Speaker 2: is where we don't where lots of places don't happen.
Speaker 3: Exactly where making our own lives harder in terms of
Speaker 3: competitive position when we look at our major peers.
Speaker 2: Loosen listing rules. I mean that was one of the
Speaker 2: problems with ARM or tech in general. Isn't it around
Speaker 2: that it's more beneficial for founders and startups or they
Speaker 2: view it is more beneficial in the American regime? Should
Speaker 2: we loosen those which are viewed by.
Speaker 3: There have been proposals on the premium and the standard listing.
Speaker 3: The FRC has been looking at what you can do
Speaker 3: in terms of reporting requirements and streamlining all of this.
Speaker 3: But you know, we've got to We've got to recognize
Speaker 3: this is this is not something particularly for an international
Speaker 3: financial center. You know, we don't sort of stand here
Speaker 3: alone in splendid isolation. We have got to recognize the
Speaker 3: rest of the world is moving forward in these areas.
Speaker 1: But what I don't understand, I mean ARM. You know,
Speaker 1: the chancer at the time, Rushie Sunek, was pitching himself
Speaker 1: for this to happen. So I guess my worry is
Speaker 1: that if he couldn't get the ARM listening right.
Speaker 2: And the rules were stacked against him, So that was
Speaker 2: part of it.
Speaker 3: But also, and I think there were sort of a
Speaker 3: variety of other factors in this, but also it's the
Speaker 3: way that government was organized. So Jerry Grimstone, who was
Speaker 3: the Minister for Investment at the time, did a lot
Speaker 3: of the heavy lifting on arm didn't quite manage to
Speaker 3: get it over the line. Obviously, if you compare the
Speaker 3: experience of an international investor who's interested in France versus
Speaker 3: an international investor or a potential listing in the UK,
Speaker 3: very different. You know, you can't move to in any
Speaker 3: other part of the world practically seeing the corner shop.
Speaker 3: You'll pop in and they've got President macaron on speed
Speaker 3: dial on their mobile phone. In fact, I think it's
Speaker 3: probably easier to listen any business lobbies.
Speaker 1: And he's coming in on the podcast.
Speaker 3: Talk about a fantastic place for answers to invest, that
Speaker 3: the French do this phenomenally well, and we haven't, and
Speaker 3: we have rested on our laurels for far too long,
Speaker 3: and I think there's been a consequence to that. We've
Speaker 3: been way too slow on this, and I think Brexit
Speaker 3: has acted as a little bit of a wake up
Speaker 3: call that we can't simply keep relying on the kindness
Speaker 3: of strangers here. We need to make ourselves look a
Speaker 3: lot more attractive.
Speaker 1: We need the red carpet like the French did. Look
Speaker 1: rouge right said, thank you so much, thanks.
Speaker 2: Very much, and thank you thanks for listening to this
Speaker 2: week's in the City. We will be back.
Speaker 1: Next week, but in the meantime, if you like our show,
Speaker 1: please head on over to wherever you listen to podcasts, rate, review,
Speaker 1: and subscribe. This episode was hosted by Me Francie Laqua
Speaker 1: and Me David Merritt, was produced by Summersadi.
Speaker 2: And additional editing by Blake Mayple's and.
Speaker 1: Special thanks to Miles selleg
Speaker 3: H.