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Trade bodies slam EU’s FTT as ‘tax on family savings’

Herman Van Rompuy 480

The British Bankers’ Association, Confederation of British Industry and manufacturing trade body EEF are warning the EU’s financial transaction tax could push up mortgage rates while driving down savings rates and pension pots.

In a letter to European Council president Herman Van Rompuy, published today, the trade bodies argue the FTT is a tax on family savings.

On 1 January 2014, 11 EU countries will introduce a 0.1 per cent tax on share and bond transactions and a 0.01 per cent tax on derivative exchanges.

The trade bodies argue the tax being imposed by the countries, including France and Germany, will have a major impact on transactions beyond their borders, including on the UK.

The letter states: “Fixed rate mortgages, gas and electricity, petrol and diesel are all examples of products in daily use where suppliers aim to minimise the effect of wholesale price rises through hedging some of the risks involved. This will become a more costly exercise.

“Ultimately the FTT is not just a tax on businesses and financial markets but also a tax on family savings. The proposed FTT will result in lower interest rates on savings products and  pension funds will face rising costs which will mean that people will get less money when they retire.”

The letter points to research from BlackRock showing the tax could cost pensioners nearly £13,000 over 20 years.

It calls for a new impact assessment for the tax to include the effect on households, businesses and financial stability.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Michael Fallas 23rd May 2013 at 4:15 pm

    The EU don’t care what the cost is or who pays it as long as they can keep their EU and monetary union project alive.

    The UK public never voted for the EU to dictate what taxes we must pay and if Cameron and Clegg can’t see this as the EU taking more power away from the UK and have the referendum they promised when that happened then I doubt we will get one at all.

  2. Julian Stevens 29th May 2013 at 10:20 am

    David Cameron’s promise to organise an In/Out referendum on the EU provided we vote for him at the next election suggests to me that the only thing he really wants is another term in office.

    What about the Conservative party’s pre-election manifesto pledge to rectify 25 years of damage inflicted on pensions by endless government meddling and tinkering? Nothing ever came of that and all we have now is a glove puppet pensions minister talking about everything and anything but.

    To get my vote and, I suspect, those of many others, he’ll have to give us that referendum BEFORE, not after, the end of the current Parliament. Talk is cheap and actions speak louder than words.

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