Some of the UK’s most influential corporate leaders have joined the CBI, calling for the removal of stamp duty on buying stocks and greater flexibility in administrative compensation, as part of a comprehensive set of proposals to revitalize London’s stock market.
In a new report next week by Prime Minister Rachel Reeves, the British Federation of Industry warns that the UK is at a critical crossroads, with its capital markets facing “survival challenges” and a decline in public lists amid U.S. competition.
The proposals were developed in consultation with more than 30 FTSE 100 leaders and investors, including executives from Anglo Americans, Shell, HSBC and AstraZeneca. They believe it is time to “take bold action” to restore London’s position as the world’s leading financial center.
The key to these measures is calling for scrapping or reforming stock transactions to impose a 0.5% stamp duty tax, which the report claims “disproportionately punishes retail investors and prevents wider participation in UK stocks. The CBI suggests that alternative tax collection methods can be explored to maintain revenue while reducing the burden on investors.
The report also promotes reforms to the annual report requirements, more incentives for overseas companies in London, especially from Asia, and efforts to build a “equity investment culture” among retail investors in the UK.
Rupert Soames, president of CBI and chairman of medical company Smith & Nephew, said: “This is a time of great change. We are facing survival challenges for the UK public market and we have to make sure we do not decline for a long time.”
Soames acknowledged that the Treasury may be reluctant to give up stamp duty income, but believes that a more equitable system can still provide similar returns without preventing participation.
The CBI also urged the government to review UK compensation rules to allow companies to compete for administrative and non-executive talent around the world. This comes amid a series of high-profile board compensation shops and a growing number of London-listed companies adapting American-style incentive programs to attract international leaders.
London Stock Exchange CEO Dame Julia Hoggett welcomed the report, calling it a “timely, crucial contribution” to the future debate in the UK capital markets.
She added that despite the measures taken by the government to modernize the regulatory framework, “we still haven’t seen a turning point in the flow of venture capital into the UK”.
The appeal was stated in a recent announcement that UK companies, including CRH, Flutter and Arm Holdings, have moved their listing to New York, or have chosen to go public there, citing deeper capital markets and higher valuations.
EY IPO EYE report released this week shows that nine companies listed in London raised £183 million in the first half of 2025, down 64% year-on-year. Analysts believe the activity may take place in late 2025 or early 2026, but the mood remains fragile.
With the decline in public lists and the growth of private capital, the CBI warned that there was no decisive reform and the UK’s risks in the global investment race were further behind.
