MPs concerned over Tobin tax implementation

MPs HAVE raised concerns that the European Union (EU) could introduce the financial transaction tax despite a UK veto.

The Treasury Select Committee wrote to Chancellor George Osborne asking him questions about the economic impact of the tax on financial transactions, its impact on the City, the effect on UK revenue and the implications of the tax being implemented only in the eurozone.

The committee asked what steps the government has taken to "ensure that the [European] Commission does not bring forward proposals on a basis allowing only for qualified-majority voting, thereby circumventing the right to veto" and whether the Treasury is working with other EU countries.

Yesterday, French president Nicolas Sarkozy hinted that the US was coming round to the idea of the tax. The Times quotes Sarkozy as saying that US president Barack Obama was "less problematic than the UK" over its implementation. Sarkozy said: "I think we have a common analysis on how to have the world of finance contribute to resolving today's crisis."