09 November 2011

Parliament may shield pensioners from FTT

Sharon Bowles said that the EP may exempt pension funds from the FTT draft proposal. Pension funds have previously warned that an FTT on derivatives, an instrument widely used by the funds to insure against any losses, would depreciate the value of savers' pensions.

“So many are sold on the idea of a transaction tax, we should try and find a middle ground. And that middle ground could be to exempt pension funds”, Sharon Bowles, a British Liberal Democrat MEP said, after her committee held a meeting with the German and French finance ministers in the European Parliament.

“Small differences in return on long-term savings make huge differences in final pension outcome”, APG, the Dutch pension fund wrote in a consultation paper to the European Commission.

Bowles is currently engaging banks in talks on how much of the tax would fall on their books and how much would fall on savers. “I personally have some concerns on how much of the tax will be borne by the man in the street and the pension funds”, the politician said.

Asked whether she would be adding an amendment to shield pension funds from the tax, Bowles said: “This is something I have been thinking about”.

Her reservations were echoed yesterday by the British chancellor, George Osborne, who poured cold water over the tax. “There is not a single banker in this world that is going to pay this tax. There are no banks that are going to pay this tax. The people who will pay this tax are pensioners”, Osborne, the head of the British Treasury, said in Brussels yesterday.

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