Government’s stance on FTT is lamentable: report
The government has dragged its feet over the imposition of the European Union’s financial transaction tax, a damning short House of Lords European Union committee report has found.
The nine-page report condemned the government’s “diffident approach to the FTT, and its repeated reluctance to take seriously” the various warnings over competition, damage to corporations and pension schemes that the tax will have on the UK, even if the UK does not agree to implement the tax.
The committee said it had warned the government “repeatedly” that inaction over the tax, or assuming falsely that it will not affect the UK if it is applied just to eurozone countries, would still have a deleterious effect on the UK.
Their warnings were backed up last week by James Walsh, policy lead, EU and international, for the National Association of Pension Funds.
He said: “The real problem with this new tax is that it would hit pension funds and savers in the UK, not just in the 11 participating countries. The FTT will apply when UK pension schemes buy shares in companies or do business with banks based in the 11 FTT member states.
“The FTT has made slow progress due to disagreements between the 11 participating nations, but it would be a mistake to think it is slipping off the EU agenda.”
According to reports, the new German government has made a clear commitment to the FTT and although the NAPF acknowledges that Germany has indicated there will be an attempt to protect pensions, the way is now clear for negotiations to re-start.
Mr Walsh added: “EU policy chiefs should be looking for ways to encourage saving and extend workplace pensions to the 60 per cent of EU citizens who currently have no access to one. Taxing saving more heavily will not help.”