Balls rejects call to end stamp duty

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The Independent Online

The Treasury has slapped down calls by Wall Street's biggest investment banks for the abolition of stamp duty on share trading in London.

The issue was raised with Ed Balls, the Treasury minister, who has been on a charm offensive in New York to sell the attractions of the City of London as a place to do business.

But at meetings with Wall Street bosses - including the chief executives of Merrill Lynch and Goldman Sachs - Mr Balls was told that the Treasury's 0.5 per cent cut of the value of every share trade is damaging the City's competitiveness.

Mr Balls said European share trading was consolidating in the City despite stamp duty, and the tax was an important source of revenue that would have to be replaced if stamp duty was abolished.

"All the evidence is that London's competitiveness is strengthening," Mr Balls said after a meeting with Lloyd Blankfein, the newly installed chief executive of Goldman Sachs.

"The more successful London is, the higher the yield from stamp duty. I think people understand that you need to have stability and strength on the fiscal side, and that stamp duty has been a significant source of revenue that has been in place for a long time."

The Government raised £2.5bn from stamp duty in the tax year ended 2004, the most recent year for which detailed figures have been published.