Monday, 3 October 2011

European politicians plot to block UK veto on 'Tobin tax'

Dr Kay Swinburne, spokesman for economic and monetary affairs, told a group of regulators in Manchester that Britain cannot afford to "relax" and rely on its veto to block the controversial FTT.
She said a group led by Algirdas Semeta, the European tax commissioner, had "already started work" on presenting FTT as a "valued added tax" - which could be imposed without being ratified by a vote.
Dr Swinburne made the comments at a private breakfast at the Tory party conference where the business fringe events are being dominated by debates on Britain's relationship with Brussels.
Last week, Jose Manuel Barroso, the president of the European Commission, announced that the FTT would be proposed as a law for the first time as a way for the "financial sector to make a contribution back to society".
The move was criticised as a "tax on the City of London" where almost 80pc of Europe's financial services are based.
Since all European tax changes have to be approved unanimously, the British Government immediately said it would use its veto to block the tax unless it was "levied globally".
In his "state of the union" address, Mr Barroso said the tax could generate revenues of more than €55bn (£47bn) a year. He said: "In the last three years, member states have granted aid and provided guarantees of €4.6 trillion to the financial sector."He added: "It is a question of fairness. If our farmers, if our workers, if all the sectors of the economy from industry to agriculture to services, if they all pay a contribution to the society, also the banking sector should make a contribution to the society."
The European tax would levy trades in shares and bonds at a rate of 0.1pc and derivative contracts at a rate of 0.01pc from Jan 2014.
Dr Neil Bentley, the deputy director–general of the CBI, said introducing the tax was "completely misguided" at a time of economic uncertainty.

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