By Simon Foy

Brexit “idiocy” is to blame for shrinking the London stock market, the founder of Arm has claimed.

Hermann Hauser, who co-founded the British microchip giant, claimed the company snubbed Britain for its bumper listing in part because of the damage done to the London market from leaving the EU.

Mr Hauser, who is no longer involved with Arm, said: “New York is a much deeper market than London and… because of Brexit idiocy, of course, the image of the London Stock Exchange has suffered a lot in the international community.”

Speaking on BBC Radio 4’s Today programme, Mr Hauser said that the ability to raise large amounts of money on the London Stock Exchange (LSE) had been curtailed since Britain left the EU. He said Arm could not raise the $10bn (£8bn) it was hoping to attract on the London market.

The company, whose microchip designs are used in billions of smartphones and other devices, was listed in London between 1998 and 2016, when it was bought by SoftBank for £24bn.

Then-prime minister Theresa May hailed the deal as a “vote of confidence” in Brexit Britain. SoftBank chief Masayoshi Son said he was “one of the first people to bet with a big size on the UK after Brexit”.

The Japanese conglomerate is now seeking to offload Arm. The Cambridge-headquartered company is trying to raise about $10bn through its listing at a valuation of between $30bn and $70bn, making it one of the largest stock market floats this year. 

Arm announced in March that it was shunning the LSE in favour of the US, spurning advances from Rishi Sunak to float in the UK.

The decision by Arm came as a blow to the Government’s efforts to encourage more high growth companies to float their shares in London

It also fuelled wider concerns about the health of the LSE after several companies fled the market in favour of New York. Irish construction giant CRH is moving its main listing to the US and Paddy Power owner Flutter is considering a listing in New York.

Mr Sunak had repeatedly lobbied Arm to float in London, either as its main market or through a dual listing. Officials had reportedly offered to bend listing rules to attract the company.

Mr Hauser said there remained a lot of support in the City for Arm, so it would make a lot of sense for Arm to have a secondary listing on the LSE at some point in the future.  

He added: “The problem is to IPO on two stock exchanges at the same time is an enormous amount of work, so the administrative effort is double.”