A Labour government would bolster London’s flagging market for new company listings, Rachel Reeves, the shadow chancellor, will claim this week.
Sky News has learnt that Ms Reeves will pledge during a visit to the US that an incoming Labour administration would reform rules to mobilise more substantial investment from pension funds.
The shadow chancellor is expected to say that this could help address a dearth of liquidity in the London stock market and that this has been acting as a deterrent to companies examining whether to list in the UK.
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The debate about the City’s attractiveness as a listing location has intensified in recent months, most notably in relation to the British-based chip designer Arm Holdings’ decision to float in New York.
A number of other companies, including Flutter Entertainment, the owner of Paddy Power and Betfair, have announced plans to seek additional US listings for their shares because of the deeper liquidity of capital markets there.
One City source said Labour was expected to trumpet statistics showing an 84% slump in the amount of money raised by companies staging initial public offerings (IPOs) in London between 2017 and 2022.
Among the reforms Ms Reeves is expected to outline is a “framework that will allow insurers and pension funds to invest alongside the British Business Bank”, according to one executive with knowledge of Labour’s plans.
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This was among the ideas contained in a review of Britain’s start-up economy headed by Lord O’Neill, the former Treasury minister and one-time Goldman Sachs chief economist.
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It was not immediately clear how that proposal would deliver a boost to the London listings market, however.
Ms Reeves’ pledge comes during a period when Labour is making a concerted effort to forge closer ties with the City and wider business community, marking a departure from the party’s approach under its former leader, Jeremy Corbyn.
Labour did not respond to an approach on Monday afternoon.
