London Stock Exchange Chief Warns of 'National Security Issue' Amidst Company Exodus

Julia Hoggett, the head of the London Stock Exchange, has issued a stark warning that the increasing number of companies leaving Britain is becoming a "national security issue." She is calling on the Labour party to prioritize boosting domestic investment to retain the country's strongest businesses.

Hoggett's intervention comes as two more UK-listed firms, Mobico (owner of National Express) and Ashtead Technology, have accepted foreign takeover offers totaling nearly £800 million. This latest wave of departures underscores a broader trend that has seen 166 companies acquired for approximately £180 billion since the start of 2023, with £74 billion in takeovers occurring this year alone. Concurrently, fewer companies are choosing to list on the London Stock Exchange.

In a piece for This is Money, Hoggett stated that while Britain has "no shortage of great companies and no shortage of capital," it suffers from "a shortage of capital that we invest in ourselves." This, she warned, risks turning the UK into a nation that creates world-leading companies only to see them scale their operations elsewhere.

"This is not simply an economic issue. It is increasingly a national security issue," Hoggett emphasized, pointing to the vital role of UK finance in sectors such as defense. She argued that a deep pool of domestic capital is essential for enabling strategically important companies to grow from the UK and become global leaders. The break in this chain, she cautioned, leads to ownership, investment, decision-making, and strategic influence shifting to jurisdictions offering more favorable conditions for scaling companies.

Hoggett suggested that capital markets should be viewed as a strategic national capability and a source of national economic security. This perspective necessitates policies that incentivize domestic investment and ensure British companies can readily access UK markets for funding.

"In the end, a country that does not invest in its future may ultimately find it no longer controls it," she added. Hoggett has previously called for measures such as abolishing stamp duty on shares and reinstating tax credits for domestic investing.

The recent departures include Mobico agreeing to a £280 million offer from Span's Autobuses de Leon, and Ashtead Technology agreeing to a £505 million takeover by U.S. private equity firm Ember Infrastructure Management. The Department for Business and Trade declined to comment on whether it would intervene in such cases. This trend also includes Associated British Ports, Britain's largest ports operator, which saw its majority stake acquired by Australian firm IFM Investors for over £10 billion.

Hoggett cited the example of Arm Holdings, a pivotal chip company founded in Cambridge. It was acquired by a Japanese investment fund in 2016 after delisting from the UK stock exchange and subsequently relisted in New York in 2023. Despite maintaining its headquarters and significant investments in the UK, its ownership and public market presence are now heavily oriented towards the U.S., including substantial investment in a U.S. engineering hub.

Hoggett stressed that her concern is not to penalize companies for leaving but to create an environment that encourages them to stay. "If British taxpayers help fund the research, British universities train the talent and British entrepreneurs create the company, we should also want the UK to be a place where those businesses can thrive as global champions," she wrote. She noted that countries like the United States have recognized the strategic value of critical technologies and have developed supportive policy, procurement, and capital environments to retain them.