John McDonnell’s new tax bad for business, savers and the economy, says TheCityUK

Shadow chancellor John McDonnell has today proposed an even wider scope for the Labour party’s proposed new financial transaction tax (FTT), expanding the controversial new tax to cover foreign exchange and commodities as well as related derivatives such as foreign exchange swaps.

The Labour mayor of London Sadiq Khan has described FTTs as “madness” and warned that such a tax could drive away business to “other parts of the world where there is no financial transaction tax” [1].

Miles Celic, Chief Executive Officer, TheCityUK, said,

A tax on financial transactions would be bad for business, bad for investors, bad for savers, and bad for the economy. It would ultimately raise everyday costs for hard working families and small businesses across the country. Savers would be hit and the value of their pensions and investments eroded.

“Our industry is already the UK’s biggest taxpayer, paying £14 out of every £100 of UK tax revenue raised. Financial centres across the world consistently go to great lengths to attract financial and professional services business, and the jobs it supports, away from the UK. They recognise what a huge national asset it is. The UK is a world-leader in financial and related professional services, but our lead will not last long if we start booting balls into our own net.”