21 December 2011

FTT might raise "no additional money at all", claims UK Chancellor

Responding to a letter from the Chairman of the Treasury Select Committee asking for details of whether an EU-Financial Transaction Tax would cause UK revenues to rise or fall, Chancellor George Osborne wrote that such a tax might raise no additional money at all for the Exchequer.

Responding to a letter (view) from the Chairman of the Treasury Select Committee, Andrew Tyrie, asking for details of whether an EU-Financial Transaction Tax (FTT) would cause UK revenues to rise or fall, the Chancellor of the Exchequer, George Osborne, wrote that such a tax might raise no additional money at all for the Exchequer.

Commenting on the Chancellor’s response, the Chairman of the Treasury Select Committee, Andrew Tyrie MP, said: “The Chancellor is telling us that an EU-wide FTT might raise no additional money at all for the Exchequer.

“Financial services is a highly competitive and mobile global industry – if the European business and fiscal environment is unfavourable then firms will vote with their feet.

“As home to Europe’s only truly global financial centre, the UK will be disproportionately affected. It is not just financial services that will suffer but pension funds and any businesses trading with Europe.

“It is crucial to avoid damaging unintended consequences.

“It is not even clear how much would accrue to the UK as opposed to the EU Budget.

“This looks like an extreme case of spending money before we have it.”

Press release

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