There is now an open debate about abolishing UK stamp duty on purchases of UK company shares. According to Clara Furse, the London Stock Exchange (LSE) chief executive, the question is not if, but when.

She also said there had been a "significant shift" in the Government's thinking about stamp duty, following a recent report by Oxford-based academic think tank Oxera. The report found that the removal of the tax would not cause the Treasury to lose any revenue overall in the long-term.

LSE chairman Dr Chris Gibson-Smith confirmed the exchange was already in talks with Treasury Minister Ed Balls on how to take the proposal forward.

Stamp duty is levied on market participants that are not registered as financial intermediaries, at a rate of 0.5 per cent of the value of purchases in UK-listed companies.

The savings and pensions industry favours the abolishment of the stamp duty.

The ABI, the trade association for Britain's insurance industry, argues that the tax raises the cost of capital to companies, disproportionately affects small investors and hurts long-term returns on pensions.

Peter Montagnon, director of investment affairs at the ABI, said: "Stamp duty is a real handicap. It is a drag on savings and investment, and makes our market less competitive. Moreover, it has encouraged the development of alternative trading mechanisms, such as contracts for difference, which have damaged transparency."

Other countries operate with either no stamp duty or operate a levy only after a set value has been exceeded, making purchases cost-effective for small individual investors. It seems odd that the UK Government can effectively levy a £5bn annual tax on pension funds, through the withdrawal of the tax credit, but still raise a further £4bn from stamp duty, of which private investors pay £514m from pre-taxed income.

Much of the dealings carried out on the stock exchange are by pension funds. This is money being saved by rich and poor alike, so stamp duty is a tax on ordinary people's pensions, and an additional burden on our insurance policies.

The Treasury, meanwhile, has strongly denied any suggestion that it was planning to scrap stamp duty on share transactions, or was in discussions with the London Stock Exchange about doing so.

Studies have shown that the stock market would do even better if stamp duty was abolished, as clearly the return on investment would be at least 0.5 per cent higher. Even so, the market continues to progress. May has seen the FTSE 100 breach the 6600 level, setting a new seven-year high. The market has taken the much-predicted rise in interest rates in its stride.

Today sees retailer Marks and Spencer unveiling its results for the year to March 31, along with a trading update on its final quarter of trading. The group reported an astonishing sixth successive quarterly rise in underlying sales in the third quarter.

Will there still be sparks from Marks? Chief executive Stuart Rose has previously stated that he expects consumers to be under greater pressure this year, and warned of a tough outlook. Sales are forecast to come in at £8.5bn though, up from £7.7bn the previous year.

* ANTHONY PLATTS is an assistant director in the Teesside office of Wise Speke, and can be contacted on 01642-608855. Views expressed are the author's own and are not necessarily held throughout the Brewin Dolphin Group. Wise Speke is a division of Brewin Dolphin Securities Ltd, a member of the London Stock Exchange, authorised and regulated by the Financial Services Authority. Prices, values or income may fall against investors' interests. You should be aware that you may get less back than you invested. Investments may not always be suitable for all individuals. If you have any doubts, you should consult a professional advisor.