UK stands firm against EU transaction tax

The UK will not be among the European Union (EU) member states participating in a financial transaction tax (FTT) under enhanced co-operation on the basis of the European Commission (EC) proposal of September 2011.

Eleven countries announced their intent at this month's Economic and Financial Affairs Council meeting: Germany, France, Belgium, Austria, Slovenia, Portugal, Greece, Italy, Spain, Estonia and Slovakia. Formal representations in writing will be submitted, after which the EC will assess the requests.

The chancellor of the Exchequer, George Osborne, intervened during the meeting to confirm that the UK will not be levying the FTT.

In a written statement to the House of Commons, he said, “The UK is not against taxation of the [financial] sector and already has a bank levy. We would not seek to stand in the way of enhanced cooperation. However, this must be done in the context of a clear proposal and in line with the [EU] treaty.”

Osborne added, “Currently, there remains uncertainty over the likely scope and the purpose for which the revenues would be used.

“I pointed out that the EC’s own original assessment had foreseen a GDP reduction of between 0.5% and 3.5% for the European economy. The impact on all 27 member states must be considered, and therefore we want to see a specific proposal,” said the chancellor.

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