Business leaders have called for the abolition of stamp duty on share deals in order to boost the economy.

Digby Jones, the director general of the CBI, said that the duty restricted investment and harmed those who invest in pension funds.

Forum Response: The Corporation of London

Dame Judith Mayhew, chairman of the Corporation of London's policy and resources committee, told ePolitix.com: "The City of London is the most competitive and comprehensive place to do business, but we cannot take this competitiveness and this position as a given right. It is something we have to work hard to protect and maintain.

"Unfortunately the imposition of stamp duty by the UK government is a negative aspect to our competitiveness.

"Putting it simply, it increases the cost of capital for UK companies by 80 basis points and reduces investment by £3.4 billion each year.

"It also reduces company pension schemes by up to £8000 per scheme over the lifetime of the policy.

"Surely neither UK companies, nor individuals can really afford such disadvantages in today's world."

Forum Response: The Institute of Directors

A spokesman for the Institute of Directors told ePolitx.com: "The abolition of stamp duty on share deals is now urgent. In the electronic age, persisting with this tax will simply mean losing business to overseas share registrars and exchanges.

"We recognise that the revenue at stake is not small, but it will fall substantially anyway as business is transferred. Other countries have reduced or abolished their equivalent charges, there is a growing range of investment exchanges available to companies seeking listings, and UK exchanges could easily be absorbed by non-UK exchanges."

Forum response: The Securities Institute

Geoffrey Turner, chief executive of the Securities Institute, told ePolitix.com: "Members of the Securities Institute support the arguments made yesterday by the Stock Exchange, the CBI, the NAPF, and other commentators arguing for the abolishing of stamp duty on transactions in securities.

"Many have noted the cost of stamp duty on the value of a typical pensioner's fund, levied on the investments over time as the fund builds up, the additional cost that it involves in capital raising operations, and the harm done to the competitive position of the London Stock Exchange as it strives to increase its market share in the intensely competitive works of electronic marketplaces.

"No one has yet mentioned the financial services action plan instituted by the EU in the search to remove impediments to the single European capital market. It seems likely that London's anomalous position with its high level of transaction tax (stamp duty) compared to other marketplaces will come to be seen as an impediment to capital markets integration and this may lead to its eventual abolition.

"In the meantime, the tax hinders business growth and productivity growth, and the heavyweight research delivered at yesterday's conference suggests that the minimum loss to the Revenue would be less than has been previously suggested and would be recouped fairly quickly through increased activity.

"To do nothing is the easy way out: abolishing the tax requires political courage, as it will surely be characterised as benefiting city fat cats. But the benefits will be wide spread. What seems impossible often proves uncontroversial if the willpower is there. Who now remembers exchange control?"