The chancellor, Jeremy Hunt, has hinted at plans to launch a tax-free “British Isa” investing in UK company shares at the spring budget, as part of efforts to revive the country’s stock market. A British stock Isa would allow investors to buy a certain amount of UK company shares, without paying tax. Currently, the government charges a 0.5% tax, known as the share purchase stamp duty, for any shares bought in the UK. It comes as Hunt tries to find cost-free announcements that could help win over voters and businesses as the Tories lag well behind Labour in the polls before a much-anticipated general election. The incentive, which some expected Hunt to announce as part of the autumn statement last November, could also complement government plans to sell shares in NatWest – which is still 38.6% government owned since its 2008 taxpayer bailout – to retail investors later this year. Hunt made the comments in front of hundreds of City bosses, who were gathered in the Raffles hotel in Westminster for an annual dinner hosted by the financial services lobby group TheCityUK. When asked whether he would consider a British Isa, he said: “So there’s a certain category of questions that I’m not really able to answer … Those are things that might appear in the budget. And that is one of them.” “Do I want to do things that mean that more UK capital is invested in our most promising companies? Absolutely. I think that something like a British Isa could be very good at that.” It comes as the City faces growing threats from rival financial hubs including New York, Paris, Frankfurt and Amsterdam, particularly post-Brexit. London’s stock market has experienced an exodus of companies chasing capital outside the UK, with Flutter Entertainment, the owner of Paddy Power, Betfair and FanDuel, saying last week that it was considering moving its primary listing to New York “as soon as practicable”. However, Hunt stopped short of suggesting he was ready to slash the 0.5% stamp duty levied on direct share purchases, which some City campaigners have claimed is a larger roadblock for local investors. Both proposals – the British stock Isa and the scrapping of stock stamp duty – have been lobbied for by City groups, including the industry body UK Finance. UK Finance’s spring budget submission paper, released earlier this week, said: “While the reforms in autumn statement 2023 to evolve the Isa regime were welcome, officials need to work with providers to ensure these changes can be properly implemented. The government should explore introducing a ‘British Isa’ focused on UK domestic equities to offer an easily accessible, trusted vehicle to incentivise investment in UK equities for individuals.” Hunt also reiterated ambitions to make the UK the next Silicon Valley, unleashing growth akin to the big bang changes to City regulations that some credit with unleashing a boom in British financial services. That would extend to a boost in tech-focused stock market listings. “We want the London Stock Exchange to become Europe’s Nasdaq,” he said.