Workers simply have no idea how companies work or how they can help, says MAGGIE PAGANO

Workers have no idea how businesses work. The hypocrisy of this government has no limits.

Earlier this week, Sir Keir Starmer took center stage at the city’s Guildhall to persuade some of the world’s leading businessmen and women that Britain is now the place to invest.

He told them that the government and investors were united in a “shared effort for prosperity.”

Growth, he said, is “vital if we are to navigate our way through a great period of insecurity and change.”

The Labor Party, he added, will stabilize the economy quickly and repair Britain’s image “as an open, outward-looking and confident trading nation”.

What nonsense: the UK has always been an open trading nation, some would say too open to foreign investment.

This was bombast at its most gimmicky, a stunt designed to show that the international business elite are taking the Labor Party seriously.

However, now, days after the Prime Minister’s showbiz kiss, leaks emerge that Rachel Reeves is considering increasing capital gains tax on the sale of shares and other assets by several percentage points.

Currently, capital gains from the sale of shares are applied at a higher rate of 20 per cent.

Apparently, the Chancellor is not going to change the exchange rate for second homes or for the purchase of rental homes. If correct, this is a strange strategy for the Labor Party to follow.

Much more wealth is created when investors put their money into high-growth companies of the future rather than bricks and mortar. Higher taxes on second homes could even release more homes onto the market.

Rising taxes on share sales couldn’t come at a worse time for the UK’s already suffering public markets.

Higher taxes on stocks will discourage investors at a time when we need more investment and trust, not less, from both institutions and private investors.

Of all the kites the Treasury flies, this one should be shot down. It’s a terrible idea, so bad that it shows how Starmer and his team simply don’t understand the core rudiments of raising capital, whatever the shiny words they dish out to the Googles or Blackrocks of this world. They just don’t get small businesses or do anything concrete to help them.

Research from think tank New Financial shows just how bad it is. More than 600 companies worth less than £1 billion have left the stock market in the last 20 years. It is no secret why this has happened.

UK companies have been consistently undervalued, listing rules have been overly complex, there is little liquidity in many shares, pension funds have fallen out of love with the shares and there are not enough analysts looking at smaller companies.

And it’s going to get worse. Removing stamp duty on all UK shares would be the best reform, or at least an exemption for all companies listed outside the FTSE 100.

Instead of raising taxes on stocks, Reeves should look for more original ways to attract investors to our capital markets.

Investigating how Sweden is the envy of European capital markets would be a good start.

With some strong reforms, the Swedes have doubled the number of private investors, pension funds have increased their domestic portfolios, while the number of new IPOs in ten years is higher than the rest of the eurozone.

Private investors will pay a 1 percent tax on their investment savings accounts this year, with no capital gains or dividend tax. There is an old saying in the North: what Sweden does today, the world will do tomorrow.

The bank must be bold

As expected, the European Central Bank has cut interest rates by 0.25 percentage points, the third consecutive cut, after September’s inflation rate slowed to less than 2 percent.

This, along with the UK inflation rate falling to 1.7 per cent, should give the Bank of England more confidence when it announces its next decision on November 7.

It’s time for the Crone to show a little more leg and opt for a full 0.5 percentage point cut, quickly followed by another.

Bad aim

The Tony Blair Institute says the Alternative Investment Market (Aim), the London Stock Exchange’s junior market, can no longer be saved and should be scrapped.

Here’s a better idea. Aim should be left in private hands and injected with new animal spirits.