Tuesday, November 22, 2011

Pearson probes, HMG wriggles over the FTT

Lord Sassoon has given what looks like a pretty robust answer to UKIP peer, Lord Pearson's, question on the Financial Transaction Tax,
The Commission has put forward a proposal to introduce a financial transaction tax under Article 113 of the Treaty on the Functioning of the European Union. Proposals put forward under Article 113 require unanimity in the Council of Ministers, giving the UK Government a veto over any such proposal. The Government oppose a European financial transaction tax.

In addition, the Commission has put forward a proposal under Article 311 to use revenues from its proposed financial transaction tax to part-fund the EU budget. Article 311 also requires unanimity in the Council of Ministers, giving the UK Government a veto over any such proposal. The Government oppose any new taxes to fund the EU budget.
But hold on a moment. What has the Government committed itself to. At first reading it looks like they will veto the FTT proposal, and if so there would be much breathing out in relief in the City.

But have they? I don't think so. Take a look again at what they say, and you can see that it is no such guarantee.

Essentially Lord Sasoon has said,
"We oppose the tax, we have a veto".
or in other words,
"I want to go to Brighton, I have a car". 
That the Minister would like to go to Brighton, and that he has a car is of no importance, what we want to know is if he will use his car to go to Brighton.

By not specifying his use of a car to take him to Brighton, when it would be very easy to do given he is possesion of a fine pair of wheels, one must suspect that the Government has no intention of using it. What is more, from the way that they have behaved in the past, one must come to the conclusion that they might well to go to Littlehampton instead if their continental friemnds persuade them to.


Anonymous said...

Here's the clip:


Edward Spalton said...

Cameron's policy is to support the euro with our credit and to encourage the eurozone countries to form a single, economic government which will, for all practical purposes, be under German control.

If this policy is successful, the voting arrangements under the Lisbon treaty will give the eurozone bloc (well-drilled after a year or two under the German sergeant) a permanent majority over the non eurozone countries for most purposes.

With continual pressure, the British veto will eventually be abandoned for some worthless concession or other -like a promise of eventually reforming the CAP some day. Repeated surrender has always been the policy of British governments towards the EU.

In any case, I would not put it past the EU to take a case to the European Court of Justice, claiming that the existence of currencies other than the euro creates a "distortion of the market" and the ECJ (running true to form) would agree. The Lisbon treaty states baldly that the euro is the currency of the EU. As Mr Cameron is wedded to perpetual EU membership, he would have no option but to agree because it would be "the law" - exactly the phrase he used over the Lisbon treaty, once it had been ratified by all member states.

Of course, a financial transaction tax would be no more a tax on bankers than fuel duty is on oil companies. They will simply pass it on to customers as part of their dealing costs. It will not affect the rich who can move their business elsewhere but will affect everybody with a private pension, unit trust or managed fund, building up to as big a robbery as Gordon Brown's raid on pension funds. As (I believe) 70% of European financial transactions take place in London, there is no doubt at all about the target.