Business View: Call this reform - Gordon should be bold enough to stamp on the duty

Stamp duty is Britain's oldest major tax. It was liked in the 18th and 19th century because it was difficult to avoid. If you wanted to sell some land, or some shares, the deal wasn't legal until some official stamped the document. To get the stamp you had to pay the tax. Game, set and match to the Treasury.

In these days of electronic transfers and e-commerce, it's an anachronism. It distorts the markets where it is levied, it increases the costs of transactions and, worse, it is often avoided by the people who should be paying the most, largely by registering ownership of properties or investments offshore. Yet our reforming Chancellor not only appears unwilling to get rid of it, he is actually using it as one of his ways of balancing his war-torn books.

One of the racing certainties for the Budget is a "reform" of stamp duty on leasehold property. This, it is estimated, will increase the tax on taking out new offices by up to 1,000 per cent, or £2600 per employee in central London (and raise at least £1bn a year in the process). While you might argue that this only brings the commercial sector more into line with the housing market, where someone buying a house for £500,000 pays a staggering £20,000 in stamp duty, this is akin to putting a fig leaf in front of the new Saatchi gallery.

If Gordon Brown was serious about either reform or making Britain a better place to do business, he would announce a review of stamp duty. He would admit this is a tax on trade, grit in the machinery of business, and work out a better way of raising the money he needs.

Is it essential to have been a member of the '80s Kleinwort Benson corporate finance team to get anywhere in the City?

The venerable merchant bank may now have fallen on hard times – labouring under the name of Dresdner Kleinwort Wasserstein, it has become an unloved cost centre in a corner of the creaking empire of German insurer Allianz. But its diaspora is gradually taking over the Square Mile.

First it was David Clementi, the cerebral deal maker who ended up being thrust into the chief executive's post at Kleinworts before fleeing to the safety of the Bank of England, where he became deputy -governor. He is now chairing Prudential Corporation and hoping to restore the insurer to its position of pre-eminence in the investment community.

Then it was Adrian Montague, who became the Treasury's favourite financier, working on everything from the creation of ISAs to the Tube PPP before taking on the selfless task of rescuing British Energy.

And why did British Energy need rescuing? In part because of the reforms to the electricity market masterminded by another of Kleinworts alumni, Callum McCarthy. His reward for a job well done was to be named chairman of the Financial Services Authority, the City's regulator.

Meanwhile, at the Takeover Panel, Richard Murley of Goldman Sachs is taking over as director general from Philip Remnant of CSFB. Go back 15 years and the two worked together at Kleinworts, in the same team as Messrs McCarthy, Montague and Clementi. Heaven knows what a force DKW would be today if the Germans had been able to hold on to this talent.

The jury in the so-called "Millionaire" trial resumes its deliberations tomorrow, deciding whether the prof with a cough helped cheat on Who Wants To Be A Millionaire. Meanwhile, another millionaire trial ended last week, one where the former tycoon Stephen Hinchliffe escaped a custodial sentence after admitting to a £1m fraud (which was only one of 21 charges against him).

In a plea bargain, Judge Jeremy Robert said that Hinchliffe could have a suspended sentence as a reward for saving the court the expense of a trial. The Serious Fraud Office, which has spent vast sums pursuing the Facia fraudster, is livid and is going to the Court of Appeal to try to secure some time behind bars for Hinchliffe.

And quite right too. The SFO has worked hard to restore its reputation since the debacle of the Maxwell trials. Its job is not only to catch the bad guys, but to make sure they are publicly pilloried. If large-ticket fraudsters can expect to avoid going into the clink if they "fess up", then there is not much deterrent, is there?

j.nisse@independent.co.uk