Britain ‘taxes London stock market to end its existence’: Rachel Reeves urged to abolish stamp duty on shares
The boss of one of Britain’s biggest investment platforms claimed the government is ‘taxing the stock market beyond its existence’ as he called for the abolition of stamp duty on share trading.
Richard Wilson, CEO of Interactive Investor, said action was needed after figures showed the London market this year suffered the biggest exodus of companies since 2009.
It was the latest call to scrap the tax, which imposes a 0.5 percent levy on all purchases of British-listed shares.
And it came as John Farrugia, co-director of estate agent Cavendish, demanded an end to the tax.
Wilson said yesterday: ‘We urge the Government to recognize the scale of this problem and act decisively.
‘This is not just for the health of our markets, but also for the health of the UK economy. It’s a lose-lose tax. We simply cannot afford not to solve this problem.”
Tax case: Figures show London Stock Exchange this year has seen the biggest corporate exodus since 2009
The comments come after it was revealed that 88 companies delisted from the London Stock Exchange this year, with only 18 taking their place – the biggest net exodus since 2009.
The number of new listings in London is expected to be the lowest in 15 years, amid a shortage of initial public offerings (IPOs).
This is despite attempts by the government, regulators and city leaders to revive the market by changing regulations and freeing up billions of pounds of pension funds for investment.
The latest blow came with the decision this month by FTSE 100 equipment rental company Ashtead to fold and list in New York.
Others that have crossed the pond include gambling group Flutter, whose brands include Paddy Power.
Wilson said the scale of the exodus was “eye-popping” and rejected initiatives under the previous government “whose observable impact, apart from the paperwork shuffling, has been zero.”
He added: “We believe the elephant in the room is stamp duty. We have long campaigned for the abolition of stamp duty on UK shares.
‘We are charging the British stock exchange with an end to its existence.’
Wilson said London is at a disadvantage compared to Europe, where duties are lower, and the US, where they are zero.
He added: “Markets live or die by the flow, and the stock market is untradable today.
“This impacts depth and valuations and leads to those who can list elsewhere, especially growth companies, doing so.
‘What remains are mainly old industries that will eventually disappear or relocate.’
Cavendish’s Farrugia backed the call to abolish stamp duty, among other measures, saying that reviving the stock market ‘requires appropriate government intervention’.
He added: ‘They need to get rid of that because we play in Britain with one arm tied behind our back.’
Wilson and Farrugia have joined a chorus of City voices in the plea, including London’s new mayor, Alastair King.
It comes after figures from fund network Calastone showed the troubled UK stock market got a reprieve last month as investors poured £317 million into UK share funds, the first inflow since May 2021.
However, the positive flow was expected to prove temporary.
DIY INVESTMENT PLATFORMS
A. J. Bell
A. J. Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund trading and investment ideas
interactive investor
interactive investor
Invest for a fixed amount from € 4.99 per month
Sax
Sax
Get £200 back in trading fees
Trade 212
Trade 212
Free trading and no account fees
Affiliate links: If you purchase a product, This is Money may earn a commission. These deals have been chosen by our editors because we believe they are worth highlighting. This does not affect our editorial independence.