Reclaim the City from Robin Hood tax risks

Stuart Fraser

has been written in recent weeks about the protest camp outside St Paul’s and about the City of London Corporation’s attitude to it.

I would like to take this opportunity to bring a degree of clarity to the situation.

The City fully supports the democratic right to protest and at no point have we tried to prevent people from doing so.

However, as the local authority for the Square Mile, we also have responsibilities to our local residents and businesses as well as to tourists and other visitors.

Just like any other local authority, the City of London has a legal obligation to maintain access to its highways and to ensure they remain fit for purpose.

That is why we are engaged in regular discussions with the protesters with a view to reaching a peaceful resolution at the earliest possible opportunity.

St Paul’s is one of the world’s great buildings and the City of London Corporation is committed to ensuring it remains accessible to all. Indeed, the City has provided considerable support – both financial and otherwise – to the cathedral in recent years, not least when we donated £1.8m to support its 300th anniversary campaign in 2004.

I did, however, find myself disagreeing with the church over one particular issue last week: the Archbishop of Canterbury Rowan Williams’s comments supporting the implementation of a Financial Transaction (FTT) or “Robin Hood” Tax.

This is an idea that has already gained serious traction within the European Union and was discussed further at the G20 meeting in Cannes last week.

With one study suggesting that 62 per cent of the revenues generated by an EU-wide transaction tax would come from the UK, it is clear that any such measure would represent more of a tax on London than on the EU.

However, the impact of such a tax would be felt right across the EU.

The European Commission’s own impact assessment says that an EU-FTT could lose more money than it raises as a result of 70 per cent to 90 per cent of all derivatives trading – much of which takes place in London – moving to more welcoming financial centres overseas.

European policymakers could be pricing all of the EU’s financial centres out of the global marketplace. What is the use of creating a level playing field within the EU, if we can no longer compete with other financial centres outside the Union?

Put simply, how can you tax something that is no longer here?

If policy-makers truly believe in a Transaction Tax then any such proposals must – as the UK government has made clear time and again – proceed on a global basis and have their impact on growth carefully examined.

The G20 has achieved a significant amount in recent years and it is only right that it should continue to set the agenda for change, with the UK and the EU driving forward this process.

I suspect a lot of those camping outside St Paul’s would be in favour of an FTT and while I might not agree with their views, I will certainly accept their right to protest.

But protesting does not require a permanent campsite on a public highway.

Stuart Fraser is the policy chairman at the City of London Corporation.