Cameron’s duplicity on taxing the banks

This post was written by Owen on February 3, 2012
Posted Under: Economy,European Union,Tories

Imagine a door-to-door salesman comes to your house one day to try and sell you a burglar alarm by telling you about the terribly high crime rate is in your area. You’re not convinced, so you tell him you don’t want one. A little while later that same salesman breaks into your house, nicks the TV and does a crap on the sofa.

Now replace “door-to-door salesman” with “David Cameron”, “your house” with “France” and “burglar alarm” with “financial transactions tax”, and you’ve pretty much summed up our government’s attitude to attempts to rein in the forces of global finance.

This was Cameron speaking a few months ago (bolded text my emphasis):

The danger, we have always believed, is driving transactions to a jurisdiction where it wouldn’t be applied. So a global tax would be a good thing, but in Britain also we have put in place stamp duty on share transactions, a bank levy.

…and this was him this week:

Boris Johnson and David Cameron today urged French bankers to quit Paris and move to London in a dramatic escalation of a row with the French president.

The Mayor joined the Prime Minister in calling for traders to escape Nicolas Sarkozy’s plans for a financial tax by setting up business in the Square Mile.

Mr Johnson said: “Bienvenue à Londres. This is the global capital of finance. It’s on your doorstep and if your own president does not want the jobs, the opportunities and the economic growth that you generate, we do.”

Hours earlier Mr Cameron condemned Mr Sarkozy’s plans for a new financial transaction levy. Speaking at an EU summit in Brussels, he stressed that the new tax could cost the EU half a million jobs.

He added: “If France goes for a financial transactions tax, then the door will be open and we will be able to welcome many French banks to the United Kingdom.”

So, in November you have Cameron telling us that of course a tax on bank transactions is a lovely fluffy idea, which we’d be only too happy to implement if only we could, but you see it just isn’t possible because all those nasty banks would move their operations abroad if we did that, and we don’t want that, do we? Then this week, he explicitly invites those very same nasty banks to move from France to the UK so they don’t have to pay the transactions tax which Sarkozy is threatening to bring in.

Cameron, in short, is explicitly trying to bring about the very thing which he previously said would make a transaction tax untenable, despite ostensibly supporting such a tax in principle. Which, perhaps not surprisingly, suggests rather strongly that his original commitment to it was somewhat less than whole-hearted. Whether this also applies to Cameron and the Conservatives’ attitude to other redistributive taxes is something about which I leave the reader to draw their own conclusions.

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Reader Comments


I sense a personal vendetta against Sarkozy for recent snubs (real or imagined – I’m a little agnostic on the Europe front). In the unlikely event that Cameron DOES eventually support a global financial transation tax, I reckon he’s only going to sign it once a few French banks have jumped ship.

Written By Rupert on February 3rd, 2012 @ 7:10 pm

I’m quite glad to see an FTT being tried, but I’m very glad the UK isn’t the guinea pig. Best thing to do is watch what happens, gather real world data and make a robust model we can test off the back of that process.

Written By Owain on February 4th, 2012 @ 9:51 am

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