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UK attacks Tobin tax plans

Thursday, September 29, 2011 - 01:59

Sept.29 - Britain's financial institutions and many businesses express anger over plans by the European Union to place a 0.1% tax on financial transactions, saying it would only support a global levy. Hayley Platt reports

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An assault on the City of London - that's the way financial and business groups have reacted to EU plans for a new financial transactions tax. London's financial center handles around 80 percent of all European deals and would be among those hardest hit by the long-awaited tax. The Commission's President Jose Manual Barroso called the proposal a "question of fairness" But the UK government is against it - fearing it could drive business out of Europe. Mark Hoban is the UK's Treasury Minister. SOUNDBITE: Mark Hoban, UK Treasury Minister, saying (English): "It will only work if it's done to global level, if it's not done to global levels, it's not done as part of a comprehensive package then people will find ways around it." The tax would come into effect in 2014. A rate of 0.1% would be put on all transactions between financial institutions when at least one of the parties is based in the EU. Barroso says it will raise about 57 billion euros a year of much needed revenue. But Britain already has a stamp duty tax on trade shares. And Will Hedden, a trader at IG Index, says it will cause more harm than good. SOUNDBITE: Will Hedden, trader, IG Index, saying (English): "Many people in the city would argue that a tax specifically on financial transactions won't solve the problem and won't avoid any future problems. What they will argue is that it will drive activity, investment and jobs away from London." Earlier this year G20 members tried to agree on a global transaction tax. They failed because many countries - like Canada, China the United States - feared it would be too easy for financial firms to evade it. This time the EU may consider making it a voluntary tax among euro zone countries only as a way of getting around the need for support from all 27 EU member states Hayley Platt, Reuters.

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UK attacks Tobin tax plans

Thursday, September 29, 2011 - 01:59