City of London officials have said that about 80 per cent of the revenues of any Europe-wide financial tax would come from London. Stuart Fraser of the City of London said the question that had to be asked was whether the proposal was "a tax on London". Mr Fraser also warned that such a tax could mean a lot of banking transaction being lost to outside the EU, and that the cost of setting up the scheme could outstrip whatever monies it raised.
Earlier, Commission president José Manuel Barroso had said banks must "make a contribution" as Europe faced its "greatest challenge". A transaction tax would need the approval of the UK in order to be implemented across the EU. The Commission said that if the UK vetoed the tax, it would look to implement it in the eurozone. Referring to "the constraints of unanimity", Mr Barroso said "further changes to the Treaty of Lisbon" may be required in order to push through measures to stabilise Europe's economy.
A spokesperson for the UK Treasury said it would "absolutely resist" any tax that was not introduced globally. "We would not do anything that is not in the UK's interests", he told the BBC.
The Treasury has said there are also a number of practical issues that need to be worked through. And the financial secretary to the Treasury, Mark Hoban, said the transaction tax would be ineffectual unless it was a global agreement. "If it's not done at a global level, it's not done as part of a comprehensive package, then people will find ways around it", he said. "They'll move business out of Europe, somewhere else, they'll find different products that are outside the scope of this transaction tax, so I think there's a lot of detail to be looked at to get this right."
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