29 September 2011
“Financial Transaction Tax is a tax on London”, says City of
London Policy Chairman Stuart Fraser
Commenting on the President of the European Commission Manuel
Barroso’s proposal to introduce a European Union Financial
Transaction Tax, and the UK Government’s reaction to this speech,
the Policy Chairman at the City of London Corporation Stuart Fraser
said:
“With one study suggesting that 62% of the revenues generated by
an EU-wide transaction tax would come from the UK, this is not a
tax on the EU but a tax on London.
“If a financial transaction tax is truly necessary to shore up
the banking system, it needs to be implemented – as the UK
Government has made clear - on a global basis otherwise it will
offer few safeguards in what is an incredibly interconnected
marketplace.
The implications on growth, both here in the UK and across the
world, would also need to be carefully examined.
“Further comments that such a tax would also ensure the
financial sector makes a ‘fair contribution’ were shown to be
misguided by the Commission’s own impact assessment.
“Not only does the financial services industry already make a
huge economic and social contribution to the EU and each of its 27
Member States but the impact assessment demonstrated that more
money could be lost by firms relocating outside of the EU than
would be raised by the tax.
“It is clear that a transaction tax of this kind has no economic
justification.
“Manuel Barroso’s comments that the tax could be implemented in
the Eurozone alone if the UK blocks its progress in the EU were
also deeply worrying.
“Following the ECB’s policy proposal regarding the location of
clearing houses, there is a danger that a two-tier Europe is being
created, fragmenting the European Single Market that continues to
provide such great benefits to the UK and our fellow members of the
EU.
“Such a move is something we should all work hard to avoid.”
Ends
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