Labour under fire over financial transaction tax plans

Labour’s plans for a financial transaction tax have come under fire amid concerns the policy will “damage growth”.

Speaking at the Labour party conference in Brighton yesterday, CityUK director of policy and public affairs Nicky Edwards said the policy will fail to achieve the stated goals.

Labour leader Jeremy Corbyn has already backed the introduction of a European financial transaction tax of 0.1 per cent on share and bond trades and 0.01 per cent on EU derivative transactions.

Edwards said: “This is being sold as the lovely idea of robbing from the rich to give to the poor, but in fact, it would be precisely the individual consumer and their household that would pay and pay again.

“At every stage of pension saving and with every product people buy, they would have additional cost loaded onto it. It wouldn’t do what it sets out to do, and it would damage growth.”

Speaking on a panel focusing on the contribution of financial services to the wider UK economy, Edwards added that more needs to be done to allow pension firms to better utilise savings assets to boost the economy.

She said: “One of the reasons that we need to have conversations with policymakers about how you regulate the industry so that its safe is so it doesn’t choke the ability to mobilise savings for investment purposes.

“Everyone who has followed Solvency II will know the tensions between safety and investment. I hope we’re moving to a place where the insurance industry in particular is able to put pension savings to work in the interests of growth in the broader economy.

“We are not entirely there yet, but I think we have made a lot of progress.”