I support the UK joining 11 other EU countries including France, Germany and Italy, in introducing a Financial Transaction Tax. This new tax could raise an additional £20 billion annually in the UK alone. This money could be invested in growing the UK economy through funding house building, education and infrastructure. It would help address London’s urgent housing crisis, fund the reintroduction of Educational Maintenance Allowance, and create jobs and opportunities for thousands of workers.
Governments across Europe and in the USA have spent vast sums of money bailing out their financial services. A tiny Financial Transaction Tax is a neat and progressive way for governments to recover some of this money. All members of society are being asked to make sacrifices to restore public finances following the collapse of Lehman brothers and subsequent the financial crash. Our financial services must pay their share too.
As writer in the Washington Post, making the case for introducing the Financial Transaction Tax in the USA, put it “The good news is that it’s a tax so small it could be mistaken for a rounding error. It’s so small, Wall Street could easily afford it and the average E-Trade investor would barely notice it. If this were a tax on coffee, it would cost you $1 for every 800 cups you bought at Starbucks.”
There are many compelling arguments for introducing a Financial Transaction Tax in the UK. A Financial Times opinion piece explains “At a time when many countries are facing budgetary pressures due to the financial crisis, the new tax would contribute towards fiscal consolidation without directly impacting the real economy. The tax might also deter excessive trading and, in the process, promote market stability and long-term investing. Financial services would no longer enjoy an exemption from value-added taxes, thereby reducing competitive distortions. Several countries impose financial transaction taxes, for example, a stamp duty on share purchases has been levied in the UK for centuries.” Compelling indeed.
Critics of the tax argue that it will make the UK less attractive, encouraging financial traders to abandon the UK for other countries. This same argument is used when people call for taxes on bankers’ bonuses. Well, Mr Mayor, I am unconvinced by this argument. I am unconvinced because the UK, London and Islington are fantastic places to live, work and do business.
If the government wants to encourage international business, they should focus on providing our young people with world-class education, training and skills. And you know, it is ironic that the government is probably doing more harm to the UK economy with their regressive attitude towards immigration than a Financial Transaction Tax ever could. Just go to Canary Wharf and see how cosmopolitan and ethnically diverse the workers are, how those leading international companies attract talented people from around the world. These talent individuals make the choice to come to work in London.
Who can blame them?
Voted “The World’s best tourist city” by Tripadviser, London has fantastic history and culture. From our theatres to our football clubs, from our museums and art galleries to our fashion and shopping, London is a top destination and this tax would not change that. We have excellent schools, including some really excellent state schools that any young person would be proud to attend.
Whatever country you come from, your community will be represented in London, where you can enjoy the best cuisines from around the world. We are even in arguably the best time zone for doing business internationally. London is the best place in the world. Don’t let anyone tell you otherwise.
I second this motion.