The real reason why the City is blocking FTTs

David Cameron says that Financial Transaction Taxes are "a bad idea", but he didn't say for who. They would clearly be massively in the interest of UK taxpayers. A 0.05% FTT applied in the UK could replace all the other forms of taxation - income tax, corporation tax, VAT, national insurance and pension contributions. A further 0.02% would pay off the entire national debt within 5 years.

But at least the latest news explains clearly why both the City and the UK government are so adamant in refusing any talk about such a tax. The frontpage of the Guardian says "HSBC shame over cash for drug barons". Hats off to the investigators in the USA who have gone through 1.4 million documents to demonstrate how Britain's biggest bank has been involved in industrial scale money laundering for Mexican drug barons as well as aiding terrorists and rogue states.  Here's just a bit of the article:

"Executives with Europe's biggest bank, HSBC, were subjected to a humiliating onslaught from US senators on Tuesday over revelations that staff at its global subsidiaries laundered billions of dollars for drug cartels, terrorists and pariah states.

Lawmakers hammered the British-based bank over the scandal, demanding to know how and why its affiliates had exposed it to the proceeds of drug trafficking and terrorist financing in a "pervasively polluted" culture that persisted for years.

A report compiled for the committee detailed how HSBC's subsidiaries transported billions of dollars of cash in armoured vehicles, cleared suspicious travellers' cheques worth billions, and allowed Mexican drug lords buy to planes with money laundered through Cayman Islands accounts."

 The original 334 page report by the Permanent Subcommitte on Investigation, released yesterday, can be found here. The proverbial shit has hit the fan.

There can be little doubt that the sort of criminal activities carried out by HSBC are widespread within the City. The entire British-run network of tax-havens in places like the Channel Islands, the Caymans and the British Virgin Islands is in large part motivated by the City's desire to be able to hide its criminal activity. That is the real reason why they don't want a financial transaction tax. Not because it is unreasonable to pay the 0.1% demanded by the European Parliament, but because it would mean that they would have to start being honest. They must not be allowed to get away with it.