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AXE SHARE STAMP DUTY, NO 11 TOLD
TUESDAY 29 AUGUST 2023
ISSUE 4,037
CITYAM.COM
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CALLS FOLLOW CHINA’S MOVE TO SLASH TAX TRADING TAX CITY A.M. REPORTERS CALLS ARE increasing for the UK’s £4bn-a-year share trading tax to be reduced or scrapped in an effort to reinvigorate our capital markets. When buying shares, Brits are charged a stamp duty of 0.5 per cent on the purchase price. Over the weekend Chinese authorities slashed their own stamp duty on shares to give battered equity markets a shot in the arm. Some are now calling for a similar move here. James Ashton (pictured), the chief executive of the Quoted Companies Alliance, said scrapping the share trading tax would be a “bold” move to give London’s stock markets some much needed life. A combination of take-private deals and a low price to earning ratio across the capital’s equity markets have seen many in the City fear for the reputation of London as a listing destination. Ashton described the tax
as “a dampener that doesn’t even exist on Wall Street”. The Treasury roped in £3.7bn from the tax in 2022-23, after a £4.4bn windfall the year before. Think tank wonks believe scrapping the tax could lead to greater interest in share trading from retail investors, boosting the long-held aim of greater participation in equity markets from ordinary Brits. “Imposing stamp duty on the buying of shares puts off investors, leaves Britain at a competitive disadvantage compared to our international rivals and makes us all poorer in the long run. Like any transaction tax – for example, the stamp duty imposed on house-buying – it results in less of the activity being taxed,” said Nick King, a research fellow at the Centre for Policy Studies and author of a recent report into boosting shareholder capitalism. “That not only means less liquidity in the
market, but that all our pension funds and savings end up being smaller, through a thousand tiny cuts of the knife.” Richard Wilson, the chief executive of retail investment platform Interactive Investor, has also called for the tax to be axed to encourage pension funds into equity markets rather than bonds. “Pension companies are increasingly cost conscious, and stamp duty is another unnecessary barrier to investing in UK shares,” he said. The comments point to a plunge in pension funds’ holding of UK equities in the past two decades and a mass migration to fixed income assets. The move has in part been triggered by tax tweaks rolled out in the early 2000s. A government spokesperson said: “A recent consultation sought views on proposals to modernise the Stamp Taxes on Shares framework. We are analysing feedback and a summary of responses will be published in due course.” £ CHINA’S PROPERTY CHAOS: PAGE 6
GREEN LIGHT FOR ULEZ Khan’s new emissions policy in play today GUY TAYLOR SADIQ KHAN’s controversial Ultra Low Emission Zone (ULEZ) will today be expanded to all London boroughs, after months of pushback and protests. From this morning, drivers across all of London will face a £12.50 charge if their vehicles fail to meet emissions standards. Khan said it was a “landmark day for our city, which will lead to a greener, healthier London for everyone”.
“All the evidence shows that it’s clean air zones like ULEZ that are the game-changer in a city like London when it comes to cutting toxic air quickly and meaningfully to protect people’s health.” But the policy has faced fierce opposition, with critics arguing it will hit the poor hardest, who cannot afford to buy newer, greener vehicles. Khan has, however, announced a £160m scrappage scheme to help Londoners with the cost of replacing their non-compliant vehicles.
British public slam Bank and Bailey’s management of inflationary cycle CHRIS DORRELL FEWER than one in five of the British public think the Bank of England is doing a good job – but a majority still think politicians should steer clear of encroaching on the Old Lady of Threadneedle Street’s independence.
Only 18 per cent of people think the Bank is performing well during an inflation spike and an economic slowdown, according to polling data from Public First. The Bank has come under pressure for its mischaracterisation of inflation as transitory. As a result, the central bank was
slow to hike rates, and inflation skyrocketed to a multi-decade high of 11.1 per cent in October last year following Russia’s invasion of Ukraine. While many economies have faced similar problems, inflation in the UK has remained higher than in
many western economies and the Bank has repeatedly overestimated the extent to which it will fall. The headline rate of US inflation has come down sharply to 3.3 per cent while in the EU it stands at
5.3 per cent. In the UK however, it stands at 6.8 per cent. One recent report, compiled by the National Institute of Economics and Social Research, suggested inflation would remain above the Bank’s target of two per cent until 2025. £ CONTINUED ON PAGE 2
INSIDE WILKO DRAMA CONTINUES P3 EYES ON GATWICK AHEAD OF RESULTS P4 UK-CHINA RELATIONS TO BE PUT TO THE TEST P6 MARKETS P13 OPINION P14-15 SPORT P19-20