Investors must pay 0.5% stamp duty tax to the UK Government when buying UK shares or other chargeable securities, which the AIC warns is making London’s stock market “less attractive.”

They argue that removing the tax would help “bring in more private capital,” which will benefit the economy and UK’s public finances, but also send a “strong message that the country is open for business.”

Richard Stone, chief executive at the AIC, also called for venture capital tax relief to be restored to its previous level at Mr Healey’s inaugural Budget on 28 October. The relief was cut by the then-Chancellor of the Exchequer, Rachel Reeves, in her Autumn Budget.

Ms Reeves cut the scheme from 30% to 20% tax relief to bring better balance to tax incentives such as the Enterprise Investment Scheme (EIS) and encourage funds to target high-growth companies; this change came into effect in April.

Mr Stone said: “We need to make sure we are supporting our most ambitious companies. Venture capital trusts play a vital role in helping companies scale up while remaining in the UK, contributing to the domestic economy. The cut to VCT tax relief from 30% to 20% in the last Budget made the scheme less attractive and will result in lower funding for the companies with the highest potential. The Chancellor should use his Budget to restore VCT tax relief to its previous level.

“The UK needs more investment if it is to deliver the Chancellor’s ambitions for greater productivity and economic growth. With stretched public finances, the Budget should focus on using government resources to ‘crowd in’ private capital to support policy priorities such as defence, key infrastructure and regional development.

“The investment company structure is perfect for long-term strategic investment, because holdings don’t have to be sold for investors to exit. Investment companies can attract retail and institutional investment alongside government finance. Given these advantages, the government should consider using the British Business Bank or National Wealth Fund to seed-fund new investment companies with specific mandates focused on its policy priorities.

“The Chancellor should also signal his commitment to initiatives started by his predecessor, such as ISA reform and the national retail investment campaign. Growth will be accelerated by the creation of an investment culture in the UK — turning the country from a nation of savers to a nation of investors. Our proposals support that ambition, and they must not be undermined by other measures which tax or disincentivise wealth creation.”

The Treasury has been contacted for comment.