Business leaders have warned Chancellor John Healey that Britain 'cannot tax its way to prosperity' and must prioritise supporting companies and investment to avoid long-term economic stagnation. Wealth manager Rathbones said in a report ahead of Wednesday's Budget that the government should focus on restoring business confidence rather than imposing further levies. The firm called for reforms to the business rates system and stamp duty on house purchases, while urging the Chancellor to resist pressure for an annual wealth tax or increases in capital gains tax. Rathbones also advocated for boosting investment in British firms through pension funds.
A separate report by the Association of Investment Companies pressed the Chancellor to outline plans for removing stamp duty on share trading. The AIC found that nearly three quarters of British investors, some 74 per cent, believe it is important to support the UK by backing UK companies. However, UK investors currently pay 0.5 per cent in stamp duty when buying shares listed on UK exchanges, a tax that does not apply to purchasing shares in foreign companies. This means a saver who buys £10,000 of shares in Rolls-Royce or Marks & Spencer pays £50 in tax, while a buyer of shares in SpaceX or Microsoft pays nothing.
Richard Stone, chief executive of the AIC, said removing stamp duty would make it easier for UK investors to support home-grown companies and investment trusts. He noted that research showed investors understand the connection between their investment decisions and the health of the British economy. The latest calls come after a series of warnings from business figures about the impact of rising taxes and increased costs on hiring and expansion plans. In the Daily Mail this month, Marks & Spencer chief executive Stuart Machin described Rachel Reeves' two Budgets as Chancellor as a 'disaster' and urged Healey to 'take the handcuffs off business'.
Camilla Stowell, chief executive of Wealth at Rathbones, said the central challenge for the Chancellor is restoring sustainable growth, adding that 'the answer cannot simply be to keep asking businesses and individuals to pay more'. She argued that economies must grow out of high debt burdens by backing investment and enterprise. Stowell noted that many of Rathbones' clients, including business owners and investors, are ready to invest and expand but need stability and a policy environment that rewards enterprise. For savers, borrowers and business owners, this debate shapes whether conditions will improve for investment returns, borrowing costs and hiring in coming years.