CBI slams EC’s bank tax support

The CBI has criticised the European Commission’s backing of proposals to tax
the financial services sector.

The business lobby group warned that any raid on financial transactions or
financial activities would ultimately hurt households and companies and also
cause banks to relocate.

Matthew Fell, the CBI’s director of competitive markets, said: “Reform of the
financial system should be focused on making it more resilient, and encouraging
lending to companies to help foster economic recovery. Simply taxing financial
services companies would have the opposite effect.

“These proposals by the Commission should particularly concern the UK
government, given that financial services make up such an important part of the
UK economy.

Fell stressed that the IMF has already rejected the idea of a global
financial transactions tax on the grounds that it would ultimately fall on users
of financial services, which means households and companies would bear the
financial burden.

“A financial activities tax within Europe would encourage financial services
companies to relocate their operations outside the EU, hurting the economies of
member states and especially the UK, owing to the importance of the City as a
global financial centre,” Fell added.

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