UK 'losing £8bn' rejecting bank tax

George OsborneChancellor George Osborne is turning his back on £8 billion a year in Treasury revenue by not signing up to a new tax on banks, it has been claimed.

The attack on Britain for not taking part came as 11 Eurozone countries won formal approval at talks in Brussels to go ahead without the rest and levy the tax on financial transactions between banks to raise extra money to fund future bail-outs.

The call for an EU Financial Transactions Tax (FTT) was suggested by Brussels in the midst of the Eurozone crisis, to force banks to contribute alongside taxpayers to the bailout burden.

But Britain has been leading opposition, insisting such a tax would have to operate globally to work fairly. The Chancellor warned the tax could damage financial centres such as the City of London and hurt the wider European economy by encouraging the trade in financial transactions to move outside the EU.

The CBI backed Mr Osborne's stand, but the Robin Hood Tax campaign accused the Chancellor of turning down the chance to raise billions in much-needed revenue.

Campaign spokesman David Hillman cited a report by Avinash Persaud, founder and chairman of Intelligence Capital, estimating an £8 billion a year revenue gain from applying the FTT to financial transactions involving UK-based banks.

"We're delighted that, in Europe at least, the public interest has trumped the profit of the privileged few" said Mr Hillman.

"This historic decision is proof that making banks pay for the damage they caused is not rocket science, but a matter of fair play and political will.

"The contrast could not be starker with the UK - how can the Government justify turning down billions in revenue to protect the super rich in the City, choosing instead of cut services for the poorest?"

The 11 countries going ahead with the tax account for 90% of Eurozone GDP and 66% of the GDP of all 27 EU member states are Germany, France, Italy, Spain, Belgium, Austria, Portugal, Greece, Slovenia, Slovakia and Estonia.
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