Jeremy Hunt calls for London to be the place tech companies choose to raise capital

Jeremy Hunt has said that London’s stock exchange should be like the Nasdaq exchange in the US and become “Europe’s place of choice” for technology companies that want to raise capital.

Speaking from the west coast of America, where he is meeting tech businesses to bang the drum for investment in the UK, the chancellor said “there is work to do to make sure that the London Stock Exchange is the place of choice for up-and-coming British technology businesses to list”.

He added that the LSE was making changes because “the future for the London stock market is to perform the role that Nasdaq does in the US”. The tech-heavy exchange is proving a magnet for companies who are looking to tap the deep pools of capital and expertise for the sector in New York.

There has been much soul searching over the UK’s future as a centre for listed technology businesses, particularly after Arm, the Cambridge-headquartered semiconductor giant, chose Nasdaq for its recent listing and other UK businesses have threatened to follow suit.

The chancellor said he had not had discussions with Arm over whether it would bring a secondary listing to London but that he would be “delighted” if it did, as Rene Haas, the chief executive, has hinted.

The comments came after David Schwimmer, head of the LSE Group, said the idea that London was losing its draw as a financial centre was “clickbait” and that this narrative had been “overplayed”.

Hunt has proposed reforms to enable institutional investors to allocate more funds to back the growth of UK private companies. The reforms could unlock £75 billion in additional investment, which would be “a stepping stone to IPOs”. He said he wanted to “make sure that the next DeepMind doesn’t have to automatically look at going to a partnership with one of the tech giants. It could actually grow under its own steam in the UK with capital raised on the UK markets.”

During Hunt’s visit, part of a government push to turn the UK into what it calls a “science and technology superpower”, he met a suite of heavyweight players from the industry to discuss increasing investment in the UK.

They included representatives of Andreessen Horowitz, the venture capital firm, Universal Music and Warner Studios, as well as Satya Nadella, chief executive of Microsoft, Ruth Porat, chief financial officer at Alphabet, and Andy Jassy, chief executive of Amazon.

Hunt said: “When I was responsible for technology ten years ago we had real problems. If I started saying ‘we want the next Google to be British’, people would laugh you out of court. Now we have 160 unicorns [privately held start-up companies valued at more than a billion dollars]. Quite serious stuff is starting to happen and that’s what makes a trip like this exciting.”

He said that the “tide is turning” when it comes to the UK’s tech industry, compared with when he was in charge of the sector as culture secretary.

On Thursday, Warner Brothers Discovery announced it was expanding its UK studios with the addition of ten new sound stages and an extra 400,000 square feet of production space in Hertfordshire.

“The entertainment industry has become a technology business over the last decade,” the chancellor said. “Everyone in Hollywood thinks they’re in the technology business. That’s why yesterday’s announcement of the increase of 50 per cent of the Warner Bros studio space in Leavesden is so significant. Our studio space in the UK has gone up by two thirds in just three years. Netflix spent $6 billion alone [on content over four years].

“There’s something quite exciting happening, which is why there’s been a lot of interest from investors and from venture capitalists, from all the big names in the tech industry.”