Bloomberg News

U.K. Lawmakers Ask Osborne to Spell Out Financial Tax Costs

November 25, 2011

Nov. 25 (Bloomberg) -- U.K. Lawmakers called on Chancellor of the Exchequer George Osborne to spell out the costs of opposing a proposed European tax on financial transactions, saying a lack of facts obscures whether Britain should adopt it.

Andrew Tyrie, chairman of Parliament’s Treasury Committee, asked Osborne to provide estimates of the amount of revenue the tax would raise after taking into account how banks would respond to it and whether they would shift trading to other parts of the world.

He also sought clarification about the potential impact on financial services in the U.K. and on British firms that trade with the euro region if the single-currency area pressed ahead with the tax.

“It is crucial to establish whether an FTT would -- taking all taxes into account -- raise any revenue and, if so, how much,” Tyrie said in a statement released by his office in London today. “On the basis of the information in the public domain so far, it is far from clear that it would be a revenue raiser.”

Osborne criticized European Union plans for a financial transaction tax as “a bullet aimed at the heart of London” in an article in the Evening Standard newspaper earlier this month.

The European Commission has proposed a plan that it says would raise 57 billion euros ($76 billion) a year. While Germany, Austria and Belgium would support a levy that covers only the euro region, Italy, Luxembourg and Ireland may oppose the tax without other countries participating. The commission proposal needs approval from all 27 EU members.

--Editors: Andrew Atkinson, Craig Stirling

To contact the reporter on this story: Gonzalo Vina in London at gvina@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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