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Osborne Renews Attack On European FTT

by Robert Lee, Tax-News.com, London

20 January 2014


UK Chancellor George Osborne has warned that a European financial transaction tax (FTT) would be expensive and destroy jobs.

Speaking this week at the Open Europe Conference, Osborne contended there are not, in fact, "two debates" on the European Union (EU), but one, which encompasses questions of sovereignty, democracy, accountability, and economics. He questioned the use of the European Commission's "enhanced cooperation" mechanism for the introduction of a Tobin tax, asking "why don't we think about using it for job creating measures that others oppose?"

The Commission's FTT proposals have been "contradicted by its own original impact assessment which showed that the policy would reduce EU GDP," Osborne added.

The UK is challenging the initiative in the European Court of Justice (ECJ), something it does not "do lightly." This is not "unthinkingly anti-European," Osborne stressed, but an attempt to "enforce European principles of non-discrimination and adherence to European law."

Osborne is also concerned that the Lisbon Treaty will, by 2016, have supplied the Eurogroup with "sufficient votes to pass any financial services legislation for the whole of the EU." He described the UK as "Europe's great global financial center," and warned that damaging it would "be very bad for the whole of Europe too."

The Chancellor condemned the European Central Bank for attempting to force clearing houses with large euro-based transactions to move to the Eurozone. The UK will be taking the Bank to the ECJ over the matter, with Osborne querying how it is possible to claim the existence of a single market "if we say that certain businesses can only locate in certain member states."

TAGS: court | tax | economics | business | European Commission | law | financial services | tobin tax | United Kingdom | legislation | tax rates | tax reform | European Union (EU) | services | Europe

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