The Government has lost a legal battle to stop Europe from imposing a “Robin Hood tax” on the City of London.
The European Court of Justice ruled against a British application to block the Financial Transaction Tax (FTT).
The court said the British application was too soon as detailed plans to implement the tax have not been agreed at EU level.
The British government has not signed up to the controversial tax, which it is feared, could lead to levies on transactions capable of severely affecting deals made in the City of London.
London Mayor Boris Johnson has already condemned the ruling claiming rival financial centres would now be “licking their lips” at the prospect of picking up trade from Britain.
And UKIP leader Nigel Farage claimed the ruling exposed David Cameron’s plan to negotiate a better deal for Britain in Europe…
Comment from the Financial Times:
Mats Persson of the Open Europe think-tank said the debate raised the question of whether London “can trust the ECJ to police the boundaries between the eurozone and single market.”
“It begs the question whether the UK in future will in good faith sign off on more eurozone integration only to see a proposal emanating with impact on the UK itself, say in the banking sector,” he added.
The City of London Corporation, which has calculated that the FTT would cost the UK £3.6 billion, said the Treasury had been right to fight against the levy’s introduction.
Mark Boleat, its policy chairman, said: “The governments pushing for the tax have already admitted that it is imperfect; it is time to let go of this punitive measure which will damage the savings of hardworking EU citizens.”
Continental Europe has always distrusted what it calls “Anglo-Saxon capitalism.”