Labour backbencher adds to criticism of stamp duty on shares
A Labour backbencher with experience in the financial services sector has urged Healey to reconsider stamp duty on shares in UK trading.
Callum Anderson, the Labour MP for Buckingham and Bletchley, set out a list of growth policies for Healey to prioritise at the Budget. The proposals break from some of the party’s current economic commitments.
In a long essay posted to Linkedin, Anderson said the government should “properly review the merits” of stamp duty on share transactions. The current tax regime applied a 0.5 per cent standard rate on the price paid for shares listed in UK markets.
Last year, the former Chancellor Rachel Reeves announced there would be a three-year tax holiday for newly-listed companies in the UK.
Among a series of other policies, Anderson said the tax raised costs for ordinary investors and “makes buying British much less attractive relative to international companies”.
The demand makes him the top Labour MP to publicly criticise stamp duty on shares, which raises between £3bn and £4bn each year in government revenue.
The tax is highly controversial among City figures, including those at Peel Hunt and the Association of Investment Companies (AIC), as London market listings have dried up in recent years.
Dan Neidle, the tax expert, also suggested cutting stamp duty on shares would have the highest positive impact for growth. Ian Corfield, the boss of Secure Trust Bank, also recently Morning Wire one of the firm’s “biggest challenges is trying to generate liquidity into the stock” as he blamed the tax as the “biggest handbrake” for stocks trading in the country.
In his essay on growth policy, Anderson said that, when he worked as a policy adviser at the London Stock Exchange, there was “pain” felt over a decision by the chip designer Arm to list in the US over the London Stock Exchange.
Stamp duty, investment and war bonds
The MP, who is now a parliamentary private secretary to equalities minister Bridget Phillipson, called for further investment reliefs that allow founders to defer capital gains tax liabilities if they reinvest proceeds of business sales into new UK companies.
He also said corporation tax expensing for companies should be extended to a wider range of products beyond plant and machinery while the government should also consider “serious preparatory design” for a UK state pension fund to reduce UK government debt’s exposure to overseas investors. While he suggested that “requiring default pension funds” to buy equities in UK companies could be “one approach”, the argument against mandation would not be stopped if the British Business Bank and the National Wealth Fund to ease risks on savers’ investments.
Anderson, who was one of hundreds of MPs to nominate Andy Burnham as Labour leader, also raised the prospect of a defence gilt being issued and targeted at older generations – and framed as trading off “a future inheritance tax liability for a lower coupon today” – to boost spending on the military. The policy proposal is backed by the Liberal Democrats and some Labour MPs.
A proposal for so-called “war bonds” could be considered by Chancellor John Healey, who resigned from Sir Keir Starmer’s government over a failure to lift defence spending to three per cent of GDP by 2030. Starmer rejected the plan as he warned against “irresponsible borrowing” to fund extra defence expenditure.