Gordon will hang on to his nice little earner

Before every Budget, for as long as memories extend, stock-brokers and fund managers have written to the Chancellor telling him that unless stamp duty on share purchases is abolished, the Square Mile will shrivel to nothing. Nowadays, the pre-Budget report gives lobbyists a second annual opportunity to make these special pleadings, while word-processors have made it easier to regurgitate the submissions. But with the same regularity that the City dispatches them, chancellors routinely reject them.

The arguments have changed over time, from a straightforward appeal about boosting City business, through claims that the tax would inhibit Britain’s euro entry, to suggestions that abolition might solve the pension crisis. The phrase ‘level playing field’ is much used. The latest assertions from the London Stock Exchange are that abolishing the tax would reduce the cost of companies’ capital by 0.8 per cent and boost share prices by 10 per cent.

Gordon Brown is too clever to be fooled by such arguments.