Labour calls on party to work towards consensus on financial transaction tax after 11 EU members vote in favour
The Liberal Democrats will on Tuesday face pressure to break ranks with their coalition partners by voting in favour of the principle of a financial transaction tax.
Labour, which is to press for a Commons vote on the issue, called on the Lib Dems to help create a consensus on the so-called Robin Hood tax which would in turn encourage the US to support the measure.
Chris Leslie, the shadow Treasury minister, will seek to embarrass the Lib Dems when he tables an amendment to a European Union document which will be presented to MPs after the decision of 11 EU member states to introduce the tax. The document notes that the government is mounting a challenge in the European court of justice against the EU proposal for an FTT which could involve a 0.01% levy on bond and share transactions.
The Labour amendment has been worded carefully to make it more difficult for the Lib Dems to refuse to support it. The amendment calls on the government to support the principle of an FTT and to work with other global financial centres, including the US, to reach consensus on a "modest rate without creating negative economic consequences".
Leslie said: "If Liberal Democrats agree with the concept of a financial transaction tax, then this is the moment for them to show their support. There should be cross-party agreement to get negotiations under way and find a consensus especially with the United States government.
"The time has come for George Osborne to get serious about a financial transaction tax. The chancellor's begrudging acceptance of the principle after that 2009 G20 in Pittsburg has not just withered away into general antipathy – he has done whatever he can to put a spanner in the works.
"Yet at a time when deficits are persistently high because of rock-bottom growth, leading economies including Britain and the United States need alternative revenue measures from continuing financial market speculation to relieve pressures on lower and middle income households and the public services they use. There are many lessons from the banking crisis, the most obvious of which is that the sheer globalised might of financial trading can overpower the plans and defences of individual nation states. Governments shouldn't just shrug and accept this fate – which is why George Osborne should champion a reform agenda to harness international financial markets so that they serve our societies and economies."
Britain opted out of a scheme to introduce the FTT in the EU when 11 member states – Germany, France, Spain, Italy, Belgium, Portugal, Greece, Austria, Slovakia, Slovenia and Estonia – announced earlier this year they had formed a "coalition of the willing". Their scheme would impose a levy on all euro transactions anywhere in the world.
The chancellor announced in April that Britain is to take the case to the European court of justice because of fears of the "extra-territorial aspects of the European commission's proposals". The City of London has the largest amount of euro-denominated transactions in the world even though Britain is not a member of the single currency.
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