The government should remove stamp duty in order to encourage investment in businesses, according to the City.
The London Stock Exchange (LSE) has called for the measure as well as backing changes to the Venture Capital Trust (VCT) regime.
The LSE says that the removal of Stamp Duty will reduce the costs UK public companies face in accessing vital equity capital, encourage investment, and help restore the value of pension funds and other savings. Crucially it will help unblock much-needed investment in small and medium enterprises, the LSE says.
“Last year, a record £71 billion was raised through our markets as many larger companies strengthened and rebuilt their capital positions through a process of re-equitisation as the risks of over-reliance on debt finance became clear,” said Clara Furse, chief executive of the LSE
“Moving swiftly to revive VCTs will help to ensure that smaller companies benefit from easier access to equity finance, and thereby help to mitigate the effects of the financial crisis on the real economy, complementing and reinforcing the steps that the government is already taking to improve small businesses’ access to bank finance.
“On AIM alone there are over 1,000 small and medium UK companies employing more than 155,000 people - dynamic companies like these are vital to our economic prospects and our ability to generate new jobs.”
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