THE EU’S planned financial transactions tax (FTT) would be devastating if it was imposed in the UK, driving business to other financial centres and bringing in very little revenue, shadow business secretary Chuka Umunna said yesterday.
He added that Labour does not want to see Britain’s financial services sector shrink, instead arguing a strong City is needed to finance growth in other parts of the economy.
The softer line to reassure the City was backed up by a promise not to back banker-bashing rules that harm the financial sector for no good reason.
“In principle I have no objection to the FTT, but it would be lunacy to unilaterally adopt it in the UK,” he told an event on banking morals and reputations in Canary Wharf.
“It would drive a flight of business out of the UK to other financial centres and not raise anything like as much as hoped.”
Umunna said any plan for the FTT would have to involve other centres like New York, otherwise the UK’s loss would simply be their gain.