Why not block TikTok and show Beijing we mean business?

Talk of a ‘stampede’ for the exit from the London Stock Exchange (LSE) may be overdone, but there’s clearly a problem. It was highlighted this week by the decisions of the Cambridge-based chip designer Arm to list in New York rather than London and of the Irish-based building supplies group CRH to shift its existing listing likewise. Other multinationals with US interests and tech ventures with hot prospects are rumoured to be thinking the same way.

In short – the argument goes – the LSE tends to generate lower valuations than New York’s exchanges because it is populated by too many old-economy stocks and risk-averse investors, including pension funds and insurers that prefer stodgy bond portfolios to high-growth equities. Brexit and the weak pound have not helped and neither does the Financial Conduct Authority, whose onerous rules have been blamed for the long-awaited and politically painful Arm decision. Meanwhile, Jeremy Hunt’s proposed City reforms, including relaxation of EU-derived ‘Solvency II’ rules that restrict institutional investment, are moving too slowly in the face of resistance from the Bank of England.

At best, this is a regulatory and presentational problem that the LSE ought to be capable of fixing. At worst, it’s a reflection of the UK in serious decline as an attractive place to do business, while the US, boosted by President Joe Biden’s tax incentives for tech ventures, looks all the better. I hope the Chancellor reflects on that as he finalises his Spring Statement.

Taking off again

‘Completely unhelpful… totally offside’ was Matt Hancock’s WhatsApp summary of the aviation industry’s response to Covid travel restrictions in February 2021. ‘Tough for them, but they are just so horribly self-serving,’ replied cabinet secretary Simon Case. ‘I can’t summon much sympathy…’

Well, this column certainly can: airlines were in the front rank of business sectors at risk of being all but wiped out by the pandemic – in its early stage I predicted widespread bankruptcies and nationalisations – and ‘self-serving’ is what every board of directors needed to be in the desperate quest for survival.