Hoban doesn’t see FTT spreading

Treasury financial secretary Mark Hoban claims France’s commitment to introduce a domestic financial transaction tax does not mean it is inevitable the levy will spread across the eurozone.

Last week, French president Nicolas Sarkozy said he would push ahead with a 0.1 per cent transaction tax.

The UK Government has repeatedly insisted it will not support a financial transaction tax unless it is introduced globally.

Giving evidence to the House of Lords EU sub-committee on economic and financial affairs, which is running an inquiry into the tax, Hoban said: “I would not assume a eurozone-wide FTT is inevitable. Some financial centres in the eurozone would be adversely affected and there are plenty of people in Europe who can see the pros and cons and perhaps share the same view as us, so I suspect recognising the degree of opposition to a FTT may be one of the reasons Sarkozy has gone for unilateral action.”

Hoban said imposing the tax within the eurozone would undermine work to boost economic growth and create jobs. He told the committee he thinks with the introduction of the bank levy, which the Treasury says now raises £2.5bn a year, the Government has the level of taxes paid by banks “about right”.

Hoban added he has seen no evidence for the claim put forward by proponents of the FTT that it would reduce risky or speculative behaviour.

Conservative peer and former Shadow treasury minister Lord Flight said he is disappointed the Government does not oppose the tax in principle, only the fact it is not being applied globally.