By Daniel Hunter
The Mayor of London, Boris Johnson has encouraged investors to back London’s science and tech sectors to ensure that the latest innovations and ideas are not snapped up by our overseas competitors denying the capital’s economy of the huge benefits they are set to deliver in the coming years.
London is already home to both the greatest concentration of tech firms in Europe and a world leading centre for life sciences where the quality of its research in on a par with the world’s greatest science cities of Boston and San Francisco. It has everything a new start up could need to grow from incubator space where innovators can find research and other partners to the finance to turn ideas into enterprises.
However, many research breakthroughs conceived by small to medium enterprises in the UK can find it challenging to access longer-term equity finance - including traditional bank loans - needed to take innovations to market and maximise their potential. There is strong evidence that many high-tech ideas conceived and developed in London are developed overseas and primarily in the US.
The Mayor wants to ensure that these high growth companies have greater access to finance at every stage of their development so they stay and grow in the capital contributing jobs and growth to the city's economy. But in the UK, there are four separate taxes, including stamp duty, on UK equity investment and he believes that reducing or abolishing some of these for investments in high-growth companies would encourage a wider set of potential investors to accelerate the growth of the important science and tech sector.
He particularly believes that stamp duty should be abolished for investments on London Stock Exchange’s ‘Alternative Investment Market’ (AIM) where most of the capital’s high growth start ups will seek listing.
The Mayor was speaking as he visited London Stock Exchange to officially open the day’s trading and to meet representatives from successful technology and life science companies.
The Mayor of London, Boris Johnson, said: “London is brimming with innovative technology and life science entrepreneurs, many of whom have the potential to build world beating businesses that will create thousands of jobs for our great city.
“However we must ensure that we provide the fertile ground these enterprises need with an environment that brings innovation together with the right investors. If we do not get it right we risk losing this high value sector to our competitors in Northern Europe and the US.”
Xavier Rolet, CEO, London Stock Exchange Group, said: "London is home to some of the world’s most exciting high growth, science and technology companies. We need to support these businesses so they can grow and create jobs. The best way to fund start-ups is not through bank loans but through equity finance. We are delighted to be working alongside the Mayor of London to make it easier for Britain’s entrepreneurs and small businesses to source growth capital. Together we must do all we can to support them."
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