13 Dec 2011

Milliband and Clegg should get together on Europe

Here's a reconstructed version of my comment that was "removed" from Jackie Ashley's piece  - minus the link to my blog that was probably considered to be "spam" by a moderator.


Don't you think that Milliband and Clegg could join together to put pressure e on Cameron and Osborne to implement the 0.1% FTT that the EC would like to introduce across the European Union?

David Cameron rejects any such idea on the grounds that it would be against "British interests". But it seems to me that he is mainly concerned in defending British interests in the network of British run tax havens in Guernsey, Jersey, the Isle of Man, the Caymans Islands, the British Virgin Islands and elsewhere.

In fact, introducing the 0.1% FTT proposed by the European Commission (and supported by Sarkozy and Merkel) would be a fantastic deal  for the British Taxpayer. With visible financial transactions (those reported to the B.I.S.) running at around 1000 trillion a year, a 0.1% tax could potentially generate a trillion pounds a year, far more than the combined revenue generated by all the current taxation mechanisms. And this doesn't even include the untold quantities of Shadow Banking and Under-the-Counter trading for which the City is famous.

Obviously, the proportion of this tax that goes to the EU should be capped, but this would be trivial for Cameron and Osborne to negotiate. Logically, it should not exceed the UKs fair share of the 141 billion euro EU budget - around 20 billion on the basis of relative GDP. If the UK government kept the rest, this could mean something like 980 billion in revenue. With that, they could do a range of things, including paying off the national debt, or abolishing income tax, corportation tax and VAT. It's the 0-0-0-0.1% plan that I have been defending.

Imagine that British citizens were given the option of zero income tax and zero VAT, and in return they had to pay 0.1% to the government when their salary was paid into their bank account, and 0.1% when they buy anything with a credit card, cheque or bank transfer. It sounds like a great idea to me. And I suspect that any political party that made such a proposal would get a landslide victory.

Sure, there will be the speculators and High-Frequency Traders in the City who will be complaining - and they currently have Cameron and Osborne under control. But how can you justify a situation where all citizens pay 20% VAT on all their purchases when the financial sector is except? How can you justify that most Brits have to pay a 2.99% FTT on all credit card transactions made in a foreign currency, while the City of London is doing 1,854 billion dollars worth of Foreigh echange PER DAY for free? And how can you justify the fact that banks can get money from the Bank of England for 0.5% interest, whereas millions of Britons are paying up to 4000% interest on payday loans?

The injustice of the current situation is indefensible . Everyone should be in this together. A 0.1% FTT would make this possible.

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