The Capital Markets Industry Taskforce has warned the Chancellor that Britain risks becoming an "incubator nation": a country that creates great companies only to lose them, with the dearth of new London listings now described as a strategic growth problem rather than a matter for the exchange alone. As someone who spends my days bringing companies to market, I recognise this diagnosis. I am nonetheless genuinely optimistic about the proposed remedy.

The three measures under consideration, abolishing stamp duty on share deals for pensions and ISAs, introducing inheritance tax relief for pensions invested in the UK, and reinstating a dividend tax credit for pension funds, are modest in cost (up to £1.28bn annually) yet could mobilise £161bn of capital by 2042. This is precisely the kind of demand-side support our market has lacked. For years the focus has been on supply-side reforms, such as listing rules and prospectus changes, while the pool of natural buyers for UK equities has steadily diminished. This proposal finally addresses the other side of the equation.

The recent record is sobering: Beazley and Schroders have both left the market this year, and bids for listed companies total at least £70bn so far. Some fund managers describe a degree of "deal fatigue" among investors. Even so, each period of consolidation also creates room for renewal. M&G's chief executive, Andrea Rossi, is right that thriving public markets should be central to the growth agenda, including linking public support to a London listing.

In my experience advising founders on IPO readiness, investor sentiment is the principal constraint, and sentiment can shift quickly once capital returns. Should the Chancellor adopt even part of this package in the Budget, I would expect a materially stronger pipeline of flotations next year. London has not lost its standing as a listing venue; it simply requires its natural investor base to be re-engaged. It is time to invest in our own market once again.

We are a team of corporate finance and ECM lawyers operating in the mid-market.  Please do not hesitate to get in contact with me, daniel.bellau@edwincoe.com.

A Corporate Finance ECM Partner