Callum Anderson, the Labour MP for Buckingham and Bletchley, has called for a formal review of stamp duty on shares as part of a wider set of growth proposals directed at Chancellor John Healey. Anderson, who serves as parliamentary private secretary to equalities minister Bridget Phillipson, published the proposals in a lengthy essay on LinkedIn, breaking from several of his party’s current economic commitments.
The move makes Anderson the first Labour MP to publicly criticise the levy, which applies a 0.5 per cent standard rate on the price paid for shares listed in UK markets and raises between £3bn and £4bn each year in government revenue. Anderson argued the tax raises costs for ordinary investors and, in his words, ‘makes buying British much less attractive relative to international companies’.
Stamp duty on shares draws fire from City and Parliament alike
Anderson is not alone in his criticism. The tax has long been contentious among City figures, including those at Peel Hunt and the Association of Investment Companies (AIC), as the number of companies choosing to list on London’s markets has fallen in recent years. Tax expert Dan Neidle has also suggested that cutting stamp duty on shares would carry the highest positive impact for economic growth of any single policy change.
Ian Corfield, the boss of Secure Trust Bank, told City AM that one of the firm’s ‘biggest challenges is trying to generate liquidity into the stock’, calling the tax the ‘biggest handbrake’ for stocks trading in the country. The former Chancellor Rachel Reeves took a partial step last year, announcing a three-year tax holiday for newly-listed companies in the UK, though critics argue the measure falls well short of what is needed.
Anderson’s essay draws on his own professional background. He recalled that, during his time as a policy adviser at the London Stock Exchange, there was considerable ‘pain’ felt over the decision by chip designer Arm to list in the United States rather than London.
A broader package: pensions, capital gains and defence bonds
Stamp duty reform is only one item in a longer list of proposals Anderson has put to Healey. He called for additional investment reliefs that would allow founders to defer capital gains tax liabilities if they reinvest proceeds from business sales into new UK companies, and for corporation tax expensing to be extended beyond plant and machinery to a wider range of products.
Anderson also raised the idea of ‘serious preparatory design’ for a UK state pension fund, intended to reduce the government’s dependence on overseas investors for its debt. He suggested that requiring default pension funds to buy equities in UK companies could be ‘one approach’, while acknowledging that the case against mandation would need to be addressed, potentially by deploying the British Business Bank and the National Wealth Fund to reduce risks on savers’ investments.
Perhaps the most politically charged proposal concerns defence spending. Anderson, who was among the MPs who nominated Andy Burnham as Labour leader, raised the prospect of a defence gilt targeted at older generations, framed as trading off ‘a future inheritance tax liability for a lower coupon today’, with the aim of boosting military expenditure. The idea has backing from the Liberal Democrats and some Labour MPs.
The proposal lands in awkward territory for the UK government. Healey himself resigned from Sir Keir Starmer’s administration over the failure to commit to lifting defence spending to three per cent of GDP by 2030, while Starmer has warned against what he called ‘irresponsible borrowing’ to fund extra defence expenditure. Whether the Chancellor is minded to revisit any of Anderson’s proposals at the next Budget remains to be stated publicly by either man.
