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Miliband gives support on financial transaction tax

Labour leader Ed Miliband has signalled his support for European proposals to introduce a financial transaction tax.

The European Commission’s proposal, announced last week, would see a 0.1 per cent charge on stock and bond trading and 0.01 per cent on derivatives contracts. The EC predicts it will raise £50bn a year.

The Government says it will resist the move unless it is implemented globally.

Speaking at a Q&A session at the Labour party conference in Liverpool last week, Ed Miliband said he would back the tax, even if it only went ahead in Europe.

He said: “We are in favour of this. It is a hard thing to do but I think it is the necessary, important and right thing to do. You have got to do it globally though for it to work, or at the very least in Europe.”

Miliband slammed the Government for failing to push for the transaction tax at a global level through the G20, despite making worldwide implementation its condition for supporting the move.

He said: “One of the Government’s biggest failures of leadership is on the international stage. It is not pushing the right solutions forward.”

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Comments

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  1. Calling it an “EU Transactions Tax” is false advertising. Over 75% of the tax will be paid by London. They should call it what it is: “An EU tax to be paid by the Brits.”

    Supporters of the FTT often tout the success of the UK “stamp tax,” but fail to disclose that most banks and investment firms do not pay the stamp tax. Over 70% of all London Exchange transactions pay no stamp tax, and 100% of all other transactions (e.g., trades on the CME or NYSE) are also exempt. Of all the transactions that originate in the UK, fewer than 3% are subject to the stamp tax. If all transactions were taxable, financial firms would exit London in droves. ICAP, with over 2000 employees in London, recently announced that they will leave the city if the FTT is implemented in the UK. Scores of other financial services firms will follow right on their heels. If these firms relocate, London would lose billions in economic activity, billions more in income taxes and capital gains taxes, and 30,000-50,000 jobs.

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