Labour leader Corbyn backs financial transaction tax

Newly elected Labour leader has lent his support to plans to implement a European financial transaction tax.

Under the FTT proposals first put forward by the European Commission in 2011, a 0.1 per cent tax would apply to share and bond trades, while a 0.01 per cent levy would hit derivative transactions between financial institutions if at least one party is located in the EU.

In April 2014, the European Court of Justice rejected a UK legal challenge against the FTT being introduced through enhanced cooperation because it was too soon in the process to rule it out.

Writing in the Financial Times, Jeremy Corbyn says Labour should back the plans, which were revived by some EU member states earlier this year.

He says: “We must work with the 11 EU nations that are co-operating to bring in a financial transactions tax.

“Unlike the current Chancellor, who wasted taxpayers’ money in a failed legal case to block the tax, we would participate in negotiations to discuss how we can better regulate the financial sector and raise revenues.”

The Labour leader also made clear the party’s position in wanting to remain within the EU, regardless of the results of Prime Minister David Cameron’s planned renegotiation of the UK’s position within the EU.

Corbyn says: “Our shadow cabinet is also clear that the answer to any damaging changes that Mr Cameron brings back from his renegotiation is not to leave the EU but to pledge to reverse those changes with a Labour government elected in 2020.

“Labour wants to see change in Europe that delivers for Europe’s people. We want to be better partners, and put our demands to make Europe better. We will make the case through Labour MEPs in the European Parliament, and our relationships with sister social democratic parties, trade unions and other social movements across Europe.

“If Mr Cameron fails to deliver a good package or one that reduces the social gains we have previously won in Europe, he needs to understand that Labour will renegotiate to restore our rights and promote a socially progressive Europe.”