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Osborne: EU transaction tax ‘may not see the light of day’

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Chancellor George Osborne has cast doubt on whether EU plans to implement a financial transaction tax will go ahead.

Speaking at the Treasury committee today, Osborne was quizzed by Conservative MP Jacob Rees-Mogg on whether the Government’s plans for a renegotiated relationship with Europe would see the UK required to collect tax on financial transactions taking place through London.

Currently, the UK will not join the plans for a FTT, but Rees-Mogg argued the attractiveness of London as an international financial centre could still be hit by a requirement to collect tax on behalf of members who are participating.

However, Osborne said: “To be honest, there’s not actually much of a proposal on the table at the moment. Although I’ve sat through interminable meetings about whether they are going to introduce one, it doesn’t seem to be seeing the light of day.

“Maybe good sense is prevailing on the councils of Europe.”

In September, EU economics commissioner Pierre Moscovici described a deal on the FTT as “within reach”.

Originally planned for implementation in 2014, finance ministers from Germany, France, Italy, Austria, Belgium, Estonia, Greece, Portugal, Slovakia, Slovenia and Spain now hope to have a transaction tax in place by 2017.

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Value remains within European equities

By Rob Burnett, Neptune European Opportunities Fund

In recent months, investors have become more pessimistic about both the European and the US economic outlook and yet stockmarkets have pushed on to new highs. Some would argue that this is a worrying divergence. We would take the opposite view. This appears to be classic bull market behaviour. A wall of worry has been rebuilt, and stockmarket resilience should be taken as a sign of strength. The market is discounting an improving economic outlook ahead, particularly in the south of Europe.

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