In the days before the internet, the annual UK Budget was famous among journalists for the motorcycle race that started immediately the chancellor had finished his speech.
These were the days when the only way to communicate the complexity of Budget proposals was to have them printed in official publications and strictly released to journalists and the public only once the speech was over.
There were many of these documents and press releases, and each was issued by a different Whitehall department, so each newspaper or magazine had to order a copy and arrange for a motorcycle courier to collect them. There was then a roaring motorbike race to get the copies to the relevant journalists, and then a race against deadlines to zip through the pages to see what devastating chunks of new policy or tax changes had somehow not appeared in the chancellor’s speech.
Hidden in plain sight
It was among these nuggets that the best stories could often be found. Apart from there being no need for racing motorbikes any more, this year’s Budget Day was no different. But the interesting item, the dog that didn’t bark, was hidden in plain sight – not in the main Budget documents but in a report issued by the Treasury on the same day. This was the UK Listings Review, an independent report commissioned by the chancellor last autumn and chaired by Lord Hill.
It is about forcing the chancellor to get a grip, ‘embedding’ politicians in the process, in the hope that they would understand the importance of business
Its aim, as the Treasury said on Budget Day, was ‘to further enhance the UK’s position as an international destination for equity listings’. The reason behind the need for the report is simple. The UK stock market has been left behind in global stock markets. As the report says: ‘The figures paint a stark picture’.
London loses out
Between 2015 and 2020, London accounted for only about 5% of initial public offerings – companies being floated on the market – around the world. The number of listed companies in the UK had fallen by around 40% since 2008. And meanwhile, the report reminded us: ‘At one point last summer, Apple alone was worth more than the combined value of every company in the FTSE 100.’
Much of the report proposed simple measures to loosen restrictions on the current global vogue for allowing founders and company directors a greater share of voting rights than other investors, in the hope that this would attract them to the London market. But the central proposal has largely been ignored.
Progress report
‘We have one simple overarching recommendation,’ the report tells the chancellor. ‘You should produce a short annual report on the state of the City, to parliament, that sets out the progress that has been made in improving our competitive position over the previous period.’
That sounds almost benign but it is not what is meant. It is about forcing the chancellor to get a grip, what consultants would describe as ‘embedding’ politicians in the process, in the hope that instead of deriding business they would come to understand its importance and work alongside it.
It says to the chancellor, with a hopeful air, that ‘you will see the point’. And equally hopefully that he will ‘set up a framework, with Treasury ministers holding the ring and co-ordinating the government’s approach across departments, reporting to parliament with the support of regulators, bringing the whole system together, working to deepen our capital markets over time’.
Take responsibility
This annual report on the City would ‘comment on what has worked or not worked, and consider areas for further reform’. It would force a measure of responsibility back onto the government. But what the report sees as the overarching idea, that an annual report to parliament on the state of the City would focus minds and create understanding across divides, is an essential one.
‘These moments when politicians, regulators and the City are aligned, do not come around very often,’ the report says. ‘I know you want to seize that opportunity. I hope this report might help you in that task.’
The report hopes that the first one will appear in early 2022. It should be made to happen. And the ghostly motorcycles of past Budget days could roar the message out across the City.
