Lord Mayor urges Starmer to ‘unleash the City’

The government is facing fresh calls to accelerate its reform of City rules and stem the “exodus” of cash away from London’s markets, as the new Lord Mayor last night urged ministers to develop a more supportive tax and regulatory environment.

In his first major speech since becoming Lord Mayor in November, Alastair King urged Prime Minister Keir Starmer to go faster with efforts to boost investment into London-listed firms, claiming the government’s current plans are not going “far enough”.

“It cannot be logically correct that, as it stands, we do not pay tax on purchases of international vehicles such as Tesla, but we are taxed for investing in a British brand like Aston Martin,” King said, referring to the stamp duty of 0.5 per cent tax levied on UK share trading.

Changing this “misalignment” would provide a “shot in the arm for homegrown companies looking to scale-up”, he added.

The boss of the London Stock Exchange, Julia Hoggett, described the tax as “pernicious” earlier this year while fund management group Abrdn and trade body, the Quoted Companies Alliance (QCA), also called for the charge to be retired for FTSE 250 companies.

“Scrapping stamp duty on share trading would send out a powerful signal that the UK and City of London are open for business,” QCA chief executive, James Ashton, told City AM yesterday, adding that an equivalent tax does not exist in the US and Germany. 

In his speech to the Lord Mayor’s banquet last night, King also called for ministers to encourage more retail investors into stocks and shares ISAs and urged the Chancellor Rachel Reeves to go further in her plans for pension fund reform.

Reeves outlined plans to consolidate the UK’s sprawling local government pension system in a bid to fuel investment last month. She has said that unleashing a wave of investment from pension funds will be at the heart of the government’s “growth mission”.

“Growth is our number one mission and reinvigorating our capital markets is key to delivering that,” a Treasury Spokesperson said.