Investment firms say scaling back tax breaks would help UK stocks, but banks and public are wary of change

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Treasury ministers are sounding out City bosses on cutting the £20,000 tax-free allowance on popular cash Isas, as they consider how to incentivise investment in UK stocks and revive the London Stock Exchange.

The City minister, Emma Reynolds, called a meeting with senior executives from six of the UK’s largest banks and building societies before what could be one of the biggest shake-ups of individual savings accounts (Isas) since their creation in 1999 under the then Labour chancellor, Gordon Brown.