THE UK is failing to combat Europe’s dangerous new financial transactions tax (FTT), a committee of peers argued yesterday, urging the government to take legal action against the proposals.
The House of Lords EU committee believes the UK would be required to collect the tax on behalf of the 11 EU nations participating.
Revenues from the levy would then be given to those other nations, reducing their contribution to the EU’s budget.
The UK should not be compelled to raise taxes for another country, the Lords argued, and should take action to stop it happening.
“We are highly alarmed that so little attention has been given to the potential impact of an FTT on non-participating member states such as the UK,” said committee chairman Lord Harrington.
“The failure to give the proposals proper scrutiny seems to have afflicted the government, the European Commission and the financial sector alike.”
Harrington particularly criticised the City for failing to notice the threat posed by the tax until it was too late.
“Some in London appear to hope that by closing their eyes to the proposal it will go away,” he wrote.
Peers also raised concerns that the FTT will cost jobs and put the EU at a competitive disadvantage to countries like the US that are not implementing a similar charge.