In a private letter sent to bank chiefs on Monday and seen by City A.M., the chancellor appears to contradict his public stance that he is firmly in favour of a Tobin or financial transaction tax (FTT) if only there were support to impose it globally.
Responding to an industry-wide letter opposing the EU’s plans for a Tobin tax, Osborne assures them that “the necessary international consensus does not exist” to impose it.
But he then goes further than his public stance: “Beyond this,” he writes, “I agree there would need to be further discussions about whether any FTT model offers an efficient mechanism to raise revenue.”
The private reassurance to bankers that he remains unconvinced about even a global Tobin tax using “any FTT model”, despite his public support for one, will relieve many in the City but could leave him vulnerable to charges of hypocrisy.
The City has mobilised to oppose an EU Tobin tax, which is supported by the European Commission and the French. Last night, the Archbishop of Canterbury backed such a levy.