Capital Markets Taskforce warns UK risks becoming an incubator nation

The Capital Markets Industry Taskforce (CMIT) has warned Chancellor John Healey that the United Kingdom risks becoming an ‘incubator nation’—a country that develops successful companies only to lose them to foreign markets once they become globally significant.

In a pre-Budget submission, the taskforce, chaired by London Stock Exchange CEO Dame Julia Hoggett, described the current shortage of initial public offerings (IPOs) in London as a ‘strategic growth problem’ rather than a localized exchange issue. The group cited the example of Cambridge-based chip designer Arm Holdings, which was acquired by SoftBank and later listed in New York, as a case to avoid.

To revive the London market, the CMIT proposed several tax-related incentives. These include potentially abolishing stamp duty for pension funds and individual savings accounts, as well as introducing inheritance tax relief on pensions invested in the UK over a 15-year period. The group also suggested a 10 per cent tax credit on dividends for pension funds, which could mobilize up to £125bn in equity by 2042 at an estimated annual cost to the Treasury of £742m.