At this week’s Borough Council Labour Councillors voted for the introduction of a Financial Transaction Tax (FTT) of 0.1% on the trading of stocks, bonds, repurchase agreements (repos), and securities lending, and 0.01% on derivatives trading to avoid the need for government cuts to public spending.
Conservative Councillors voted against the motion!
Cllr Peter Thompson commented,
“Labour is living in cloud cuckoo land if they think that taxing every financial transaction will someone solve all our problems and allow the government to stop cutting public spending.”
“Given that the largest institutional investors are pension funds such a tax will significantly increase their costs and affect every pensioner with a private pension pot. Furthermore the FTT will be avoided by rich people with the ability to shift transactions outside of the EU. If it were introduced here, the FTT would cause a flight of talent away from London, as financial services firms relocated to global centres where the tax does not apply. Indeed, at a time when we are struggling in terms of economic growth, it seems ludicrous to introduce a tax which could cost 0.3% of EU GDP.”
“Most of the revenue from this tax would be generated in the UK and under the European Union’s proposal would be repatriated to Brussels, which understandably, we are not too happy about.”
“Labour’s stunt motion may cause them amusement but it doesn’t detract from their failure to sort out the banking system both in Britain and globally during the 13 years that they were in power. Former Bank of England Governor, Mervyn King, recently said that “within Europe, I can’t find anyone in the central banking community who thinks it’s a good idea” – I think that Labour in Hounslow should listen carefully to his words.”