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London’s junior stock exchange should be scrapped as part of a radical overhaul needed to attract fast-growing firms and rejuvenate the UK’s capital markets, two influential think tanks have warned.

The UK’s capital markets are “not fit for purpose” and require “radical surgery”, the report from The Tony Blair Institute and the centre-right think-tank Onward said.

London was once the world’s largest stock exchange, but now ranks sixth, while it has failed to win a number of major new listings from tech companies.

Building materials group CRH and gaming group Flutter have shifted their primary listings to the US as companies seek to bolster their valuations, while Cambridge-based chip designer Arm also opted to float in the US instead of Britain to fetch a bigger price tag.

The London market has been left “dependent on legacy firms” such as energy and finance stocks that do not have the growth potential of technology businesses, the report said.

“Aim has failed in its stated purpose of providing a home for scaling businesses. It should be fully merged with the LSE’s main market, with a special route to listing specifically for high-growth firms in emerging technology sectors.

“In this way, London can differentiate itself from other global exchanges and attract a pipeline of high-quality, innovative companies.”

Tax breaks for investors in junior market stocks should be maintained for companies that seek the high growth path, it recommended.

Some 76 companies delisted from London’s Aim market last year, while executives of “the UK’s most vibrant companies” have publicly stated that they would not consider listing on London’s exchanges, the report said. “Low liquidity, diminished investor confidence, and a shrinking pool of capital available are compounding the exodus”, the report added.

“The UK’s ability to finance growing tech companies is in trouble, but decline isn’t inevitable,” said Zachary Spiro, a policy fellow at Onward.

Other actions recommended by the report included slashing red tape and establishing a “Growth Capital fund” with £1bn to support the creation of five large-scale growth investors for science and tech firms.

“Britain’s competitiveness has fallen and we are no longer the financial powerhouse we once were,” said Benedict Macon-Cooney, chief policy strategist at The Tony Blair Institute.

“If we are to reclaim our throne we need bold reform to attract the best and brightest, build the next generation of superstar companies, and make us an economic power in the modern world.”

However, other corners of the City have argued for measures to support the Aim market. Barclays has suggested tax reliefs for investors in businesses that graduate from the junior exchange to the main market.

James Ashton, chief executive of the Quoted Companies Alliance, an organisation representing small companies, said that Aim was “an essential alternative for growth companies that feel they are not ready for the main market”.

“Its loss would narrow UK funding options and risk ingraining further a one-size-fits-all approach to regulation and governance that punishes small, entrepreneurial stocks,” he said. “Without it, I suspect fewer companies would IPO and more that are quoted would quickly go private.”

He added that many Aim stocks are too small to be eligible for the main market, which requires a minimum market value of £30mn.

Additional reporting by Michael O’Dwyer

CHOOSING the right advent calendar can make the countdown to Christmas even more magical.

It’s no longer about indulging in a single square of chocolate. Instead, children can open a toy a day which is not only healthier, but it lasts longer too.

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And there is something for all children, whatever their interest.

From Lego to Lilo and Stich, and Harry Potter to The Gruffalo, there are calendars themed around almost every kids’ character around.

Here mum-of-three Lynsey Hope, 43, from West Malling, Kent, picks her favourites:

Smiggle Harry Potter Advent Calendar

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This one is a great choice for Harry Potter fans. Featuring 25 mystical gifts, this calendar includes whole notebooks, goo, a key chain and spy pen.

All the items are good quality and though the calendar might seem expensive at first, you do get quite a bit for your money.

There are about four character rubbers so would perhaps of preferred a bit more variety, but it went down a storm with all three kids.

Lego Star Wars Advent Calendar

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A particularly impressive version for 2024, my son’s eyes lit up when he saw this calendar.

There is something particularly Christmass-y about Star Wars. This has five unique mini-figures including a Christmas Luke Skywalker and Princess Leia and a number of mini builds including The Emperor’s Shuttle and The Crimson Firehawk.

No matter your age, you’re never too old for Lego and this advent calendar will delight adults and children alike during the festive countdown.

Disney Stitch Mad Beauty Advent Calendar

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Even though Stitch was invented by Disney more than 20 years ago, this loveable character is still having his moment and as a result, this calendar will go down a storm.

It’s full of gentle bath and body treats including a range of bath fizzers and clay masks, foot lotion, hand cream, bubble bath and lip balm.

It was easy to open and none of the products seemed to irritate my daughter Olive’s skin.

She is seven – and loved this. It was her top choice for the countdown to Christmas, even over chocolate.

Brio World Train Set Advent Calendar

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This contains great quality bits of train set which will fit with other Brio track if you have any.

You get one Mr & Mrs Santa Claus, a snowy train and trailer, some track, signs, fences, parcels and a little bunny. The doors were quite hard to open and my four-year-old needed help every time.

There’s not loads on its own but it’s great that it goes with the rest of her wooden train set. Ivy really loved the two Christmas figures.

Build -your-own Pinball Machine Advent Calendar

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• £24.99, buildyourownkits.com

Hidden behind each door is a set of instructions allowing you to gradually build a mini pinball machine for the 25th.

It was easy to assemble and comes with swirly glass marbles allowing you to start playing as soon as the machine is made. It was a real hit with the kids once built and provided hours of entertainment.

My only complaint is that some of the doors were a little dull as you have to wait all month until its ready to go so definitely one for more patient kids.

No glue is used in the making, so this can easily be broken down and recycled when the time comes.

Panini Premier League Trading Card Game Countdown Calendar

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• £35, paniniadrenalynpl.com

Sure to draw the eye of any football fans, this Panini calendar is bigger and better than ever.

It has 18 supercharged special card categories including Hypersonic, Breakthroughs and the much-coveted, ultra-rare Invincible cards. In total there are 18 packets and six limited edition cards.

My ten-year-old son Jacob loved this and was the envy of all his friends.

Be warned, however, it is quite big and bulky if you are tight on space.

JoJo Maman Bebe Father Christmas Workshop Advent Calendar

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• £38, jojomamanbebe.co.uk

This is a super attractive and reusable advent calendar which is actually nice for the whole family.

It contains 24 wooden figures including Father and Mrs Christmas, Rudolph and snowmen.

The sides of the box open out to create a play scene and unlike some of the other, rather unsightly and bulky boxes, this does create a bit of a decoration for the home too.

National Geographic Rock, Fossil and Mineral Advent Calendar

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Rocks, fossils, minerals and gemstones – this calendar has them all.

The kids loved opening geodes, pyrites, agate, urchin and more, and on the last day they will receive a special rose quartz.

It also comes with a magnifying glass – a great option for budding scientists.

Electronic Games Advent Calendar

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Open the doors of this retro looking calendar to find a new electronic component each day.

The parts allow you to build 24 different old fashioned games including Code Breaker, Memory, Whack a Mole and Wire Maze.

This one is great for older kids that like building and electronics.

Be aware you do need three AA batteries, which don’t come behind the doors – you’ll need to buy them separately.

The Gruffalo Musical Christmas Advent Calendar

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A cute musical calendar that plays three songs from the Gruffalo’s Child soundtrack.

Behind the doors you’ll find pop-up scenery, stickers and dancing characters that are able to skate around the music box base as you count down the days to Christmas.

It has three magnetic characters: The Gruffalo, The Gruffalo’s Child and Snake.

It needs three batteries, which are included, and this can be reused for years to come making it great value for money.

Slime Advent Calendar

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A rather messy calendar but it will keep the kids busy on the run up to Christmas. It’s very fun with gifts including 16 fluffy slimes, eight glitters and seven little toys.

The slimes do come in a pot to keep them fresh. You could make quite a lot with the contents and it did keep the kids happy for some time.

Smiggle Advent Calendar

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If Harry Potter isn’t your thing, Smiggle also has this option, which contains 25 complete surprises.

The various goodies include a magic cube, a squishy, a bouncing ball, a rainbow pencil, a kaleidoscope and a fidget spinner.

Every single day, these toys were well received by old and young children alike. It’s quite bulky to store, but that’s my only complaint.

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RM Williams, the Australian bootmaker and outback wear company, is targeting Britain’s affluent regions as part of its billionaire owner’s plan to transform the company into a stronger international fashion brand. 

The company, which was founded in 1932 by bushman Reginald Murray Williams as a leather goods business, will open a store in Marlow in Buckinghamshire this week and another in Cambridge in December as part of a push into the UK regions.

It has also strengthened its ties with retailers in the country and its boots and apparel will feature prominently on the shelves of department stores Selfridges and Harrods, which will stock crocodile-skin boots that sell for A$5,000 a pair, this month. 

The Australian company’s Chelsea boots are one of the most recognisable products produced in the country. Boris Johnson name-checked RM Williams alongside Vegemite spread and Tim Tam biscuits when he announced a free trade agreement between the UK and Australia in 2021. 

RM Williams has long had international ambitions having opened its first UK store in Knightsbridge in 1989. It now has two shops in London. A major international expansion into retail was planned when it was under the ownership of L Catterton, the private equity investor backed by luxury goods company LVMH.

However, the company was sold four years ago to Tattarang, the family office of billionaire iron ore magnate Andrew Forrest and his now estranged wife, Nicola, who have invested in revamping the heritage brand’s range and doubling its production capacity. Tattarang also owns Akubra hats, another heritage Australian brand, and has forged closer links between the milliner and RM Williams. 

RM Williams’s revenue has grown 82 per cent to about A$300mn a year since the Tattarang takeover according to the company.

Paul Grosmann, chief executive of RM Williams, said that international expansion had previously been inhibited by production constraints. “We struggled in the past to meet demand,” he said, adding that it had added 350 staff and doubled the size of its Adelaide facility since the Tattarang takeover. 

He added that RM Williams would sit alongside other heritage brands such as Barbour that appeal to both urban professionals and people in the countryside. “It does cross over,” he said of the company’s ability to sell boots — which retail for hundreds of dollars a pair — to stockbrokers in its home market despite its roots in rugged workwear. 

Grosmann, who ran Nike’s stores in China before joining RM Williams, said that the company intended to “properly embed ourselves in the UK market” before “springboarding” into other markets “when the time is right”. 

Fans of the boots include Cillian Murphy, the actor who wore a pair to an Oppenheimer preview, singer James Taylor, who visited the company’s Adelaide workshop while on tour this year, and Lex Greensill who was pictured wearing the boots in the desert alongside David Cameron.

Geetanjali Saluja, a senior lecturer at University of Technology Sydney’s Business School, said that Australian brands including Aesop, the cosmetics company owned by L’Oréal, women’s fashion label Zimmerman, which is majority owned by Advent, and sleepwear company Peter Alexander had all broken through overseas partly by playing to their Australian heritage. 

Saluja said that RM Williams would use the wider retail presence in the UK to help refine its position as a “status symbol” for certain buyers. “They’re a good quality product but it’s not clear where they stand as a brand,” she said referring to its strategy under previous owners. 

Grosmann said that the UK expansion was “putting a lot on the line” for the 92-year-old company as it revived its international plans. “It’s a delicate line to walk — to become globally relevant while staying true to your roots,” he said.

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The drugmaker Eli Lilly told the-then UK health secretary last year that its new Alzheimer’s drug could be a one-off preventive treatment course, despite limited data to back up these claims, freedom of information requests have revealed.

In a December 2023 meeting with the Conservative minister Victoria Atkins, Eli Lilly’s chief executive David Ricks said that the company’s donanemab drug had “the potential to prevent Alzheimer’s by treating those with a diagnosis before symptoms have developed”. This would be done by reducing the amyloid plaque protein clumps in the brain that are thought to cause the disease, according to paraphrased minutes released in response to the FOI requests.

Atkins noted the drug’s “game-changing potential”.

But the company has yet to prove this is the case: a study examining donanemab’s preventive potential is not due to end until 2027, a point that was not made clear in the meeting minutes provided for the FOI requests.

Asked about the minutes, Lilly told the Financial Times it believed “there is the potential to treat those with an Alzheimer’s disease diagnosis before symptoms have developed, which we are validating through our ongoing trial”.

The comments have been revealed as drugmakers face more scepticism from European than from US regulators about the costs of identifying eligible patients and administering new Alzheimer’s drugs as well as safety concerns, after a rival treatment was rejected by the European Medicines Agency.

In a wide-ranging discussion, Ricks also told Atkins that donanemab was a “one and done treatment course, with amyloid plaque taking a couple of decades to reaccumulate after treatment”.

Amyloid does build up slowly in the brains of Alzheimer’s patients but whether donanemab is a “one and done” treatment is unknown because the drug has only been trialled in recent years.

Several experts said it was difficult to tell yet if the drugs had preventive potential, while longer-term benefits were also unproved.

Lilly told the FT that its ongoing trial exploring the preventive potential of the drug involved “nine monthly doses [delivered by infusion], following which therapy is stopped”. After the amyloid is removed “it will likely take many years to accumulate”, it added.

Atkins said that meeting companies like Eli Lilly was “one of the most exciting parts of the role to understand the developments and treatments” for diseases like dementia.

The meeting was one of several between Eli Lilly and Conservative health ministers in 2023.

Eli Lilly’s drug is being reviewed by the UK’s Medicines and Healthcare products Regulatory Agency (MHRA) to treat patients with symptomatic, early-stage Alzheimer’s.

Donanemab and lecanemab, a rival treatment developed by Japanese drugmaker Eisai and US biotech Biogen, have both been approved by US and Japanese regulators. But the European Medicines Agency has rejected lecanemab and is still assessing donanemab.

The MHRA approved lecanemab for UK use in August but Nice, the
National Institute for Health and Care Excellence cost-effectiveness watchdog, said it would not be prescribed by the NHS because its benefits were “too small to justify the significant cost”.

During clinical trials, lecanemab slowed the progression of Alzheimer’s disease by four to six months in people in the early stages of the disease. Donanemab slowed it slightly more.

However, 27 per cent of lecanemab patients and more than a third of donanemab patients experienced “amyloid-related imaging abnormalities” (Aria) caused by brain swelling and bleeding.

In its decision to reject lecanemab, the European Medicines Agency said “the seriousness of this side-effect should be considered in the context of the small effect seen with the medicine”. The MHRA has called for testing for a gene linked to higher Aria rates.

Another challenge for health systems is the infrastructure required to diagnose the disease early enough for the drugs to be effective and to administer them and monitor patients for side-effects.

In his meeting with Atkins, Ricks noted that the Pet scans — used to identify potential patients and monitor their progress — are “expensive and there are not enough Pet cameras to test at the scale required”.

Eisai is appealing against both the Nice decisions and the EMA’s ruling. Gary Hendler, head of Emea at Eisai, said regulators should avoid making “a short-term decision that could impact R&D in the long term.”

Lecanemab is “obviously not the panacea, it’s not the cure. But without the first step, what’s the add-on medicine? Where do you go after that?” he said.

Anne White, head of neurology at Lilly, said it was “hugely disappointing that they reacted this way to [lecanemab]”. She added that it was “almost unthinkable” that new Alzheimer’s drugs would be “available in the US, China, Japan, UAE . . . across the world potentially and then, not in Europe”.

The EMA and MHRA declined to comment.

UK chancellor Rachel Reeves is hoping to attract billions of pounds of private finance to upgrade the nation’s creaking infrastructure and will be courting potential investors at the government’s investment summit on Monday.

Private finance schemes are already used more extensively in the UK than anywhere else in the world and include the energy, water and telecoms sectors and some ports and roads. Companies and investment funds provide upfront cash for projects, mostly in the form of loans with some equity. They recoup and earn a return on their initial investment via customer bills or taxpayer charges, sometimes over many years.

But the patchy record of private finance over the past few decades has triggered debate about which is the best model for attracting investors while still providing a good deal for taxpayers.

Will the Regulated Asset Base model remain dominant?

The most widely used method of securing private finance for infrastructure projects is the Regulatory Asset Base model.

The RAB model gives a value to a collection of physical assets, such as pipes and pumping stations, which can be borrowed against, much like a mortgage on a house. As it is used by companies that are natural monopolies, the regulator sets the charges to customers. This provides a guaranteed revenue stream to repay investors.

It is now being used to finance new projects, such as the Thames Tideway, a £4.5bn sewage tunnel being built under London.

This model allows investors to charge customers while the asset is still being built so they can receive returns from day one. For example, Thames Water’s customers are already paying for the Tideway through an annual surcharge of £28 per household added to water bills.

The late infrastructure expert Martin Blaiklock likened it to a diner “being forced to pay for a meal at a restaurant before the restaurant has even been built, let alone served any food”.

The government often acts as a backstop so if there are significant cost overruns, it has to inject equity or take over management of the project.

Contracts for difference model: the best option for low-carbon energy?

Contracts for difference are the government’s main mechanism for supporting large, low-carbon power infrastructure, providing certainty for investors on the price they will receive for the energy produced. The model has been used to support renewables throughout the UK, including one of the biggest solar and battery farms in Kent, which should provide enough renewable power for 10,000 homes.

The CFDs guarantee a set price for electricity — known as a strike price — that generators receive per unit of output. As the wholesale market price fluctuates, the generator is either paid a subsidy up to the set price, or pays back any surplus above the set price.

Similar models include the cap and floor regime, which sets minimum and maximum levels of revenues for energy storage and interconnectors to neighbouring countries.

The government is also setting up the state-backed Great British Energy, which it says will “attract private investment in the UK’s clean homegrown power”.

Will there be a PFI revival?

Private finance initiatives were canned for central government projects in 2018 after they were deemed poor value for taxpayers. Special purpose vehicles are set up by investors who hire contractors to build and maintain infrastructure such as schools, hospitals, housing or roads.

The Labour government is being urged by investors to launch a new version of PFI after a review by former Siemens chief executive Jürgen Maier backed the model.

A relaunch would come at a difficult time as there are a growing number of legal disputes between investors and public authorities over the terms of the contracts in the previous wave of PFI projects. Many local authorities and NHS trusts are also saddled with crippling debt repayments.

Former Labour minister Lord Hutton believes an amended version of PFI could work for future projects. This could include the Welsh model, where the government or local authority takes an equity stake and investor returns are capped.

Water regulator Ofwat is also encouraging utilities to use a similar model called “direct procurement for customers” for £14bn of new infrastructure.

Government guarantees: too much risk for public sector?

The government guarantees scheme is run by the UK Infrastructure Bank and provides unconditional assurance to lenders that they will be repaid in full in exchange for a fixed fee.

Most recently it was used to back Gigaclear, a broadband company, but the UKIB says it has more in the pipeline.

A 2016 National Audit Office report criticised the scheme for transferring “risk to the public sector”.

The UKIB invests in infrastructure projects alongside private investors and has recently been put in charge of managing the new £7bn National Wealth Fund.

What will the government do?

As the government is seeking to limit public borrowing it is expected to stick with most of these existing schemes.

Richard Threlfall, head of global infrastructure at KPMG, an adviser on several privately financed projects, said: “All infrastructure is ultimately paid for by us as citizens and consumers — but although private capital is more expensive than government borrowing it ensures the asset is delivered and maintained, rather than being deprioritised due to public spending constraints.”

But Stephen Glaister, infrastructure expert at Imperial College London, said the government should “avoid getting into overlong, unmanageable contracts just to disguise the total amount it is really borrowing”. 

Infrastructure experts also argue that where private finance is used it needs to be more tightly regulated. In particular, Alex Jan, a former economics director at Arup who advised several PPP schemes, said the schemes needed to be more transparent.

“It would be an easy hit for the government to insist on full disclosure on returns in exchange for public subsidies,” he said.

But Dieter Helm, utilities expert at Oxford university, warned that Labour’s pursuit of private finance meant it risked “leaving as its legacy a great new burden of debt that will have a long aftertaste, as did the earlier PFI schemes and the great financialisation of the utilities as witnessed in the disaster at Thames Water”.