The Great Debate UK
–Tanuja Randery is the CEO of trading services firm MarketPrizm. The opinions expressed are her own.—
As the economic downturn continues to drag on, the cynics amongst us might be forgiven for thinking that the “Tobin Tax” is a move by politicians to curry public favour by taking punitive measures against the financial services sector.
On 14 February, 11 out of the 17 euro zone nations agreed to implement the Financial Transaction Tax (FTT), a tax on bond, equity and derivatives transactions, in January 2014. Two countries have already rolled it out — France, last August, and Italy, which followed suit on 1 March this year. The UK, Netherlands and Sweden are all strongly opposed.
On the face of it, the FTT appears small — 0.1%. However, the tax is cumulative and cascading, affecting a chain of trading and clearing including vendors, brokers and clearing members. Each sale along the chain will be taxed. Also, the tax will be levied on any bank registered in a country that does apply the tax, even if the transaction takes place in a country that hasn’t implemented it. This means that if a UK bank does a trade with an Italian bank, they will be taxed twice, with both the UK’s domestic stamp duty as well as the FTT.
It was bound to happen. You could see it waddling into view from a long way off. We are now being told by the medics that we should seriously consider a tax on fatty foods, in order to combat the scourge of obesity. How appropriate that, according to The Independent, the Deputy PM is planning to recruit 65,000 “State Nannies”!
One wonders how the new tax will be computed. Will it be a higher rate of tax on higher fat-content foods? Will chicken breast be taxed at a lower rate than chicken legs? Will omega-3 fats be taxed at a lower rate than omega-6? Either way, we can look forward to a tabloid feeding frenzy which will make pastygate look like a Cornish picnic.
By Joe White
Delivering his second budget speech yesterday, Chancellor George Osborne revealed that he is leaving in place all of the austerity measures which will have a direct impact on the public sector. Meanwhile, there was a lot of policy aimed at supporting business and the private sector. The implicit assumption is that the private sector will take up the slack and continue to drive growth. This is the gamble, and we will have to wait and see if it works.
The government’s predictions for growth are down, and the reliance on the OBR forecasts could come back to haunt George if it starts to get worse and they continue to further revise down their independent estimates. Growth is the ultimate balancing factor for the public finances, so it is all important.
The second budget presented to Parliament by Chancellor George Osborne is likely to be less talking and more doing when it comes to bringing the UK’s public finances under control.
This won’t be to everyone’s tastes. Some argue that the UK is in less financial danger than Europe’s financially troubled states, yet Osborne is embracing deficit reduction plans with as much gusto as Ireland or Greece.
By Thomas Story, Tax Director, BDO LLP. The opinions expressed are his own.
George Osborne has promised that measures to boost sustainable growth will be central to this week’s Budget. To meet this objective, the Chancellor faces the challenge of accelerating the reform of business taxation within the severe constraints imposed by the overall fiscal position and the political imperatives of the coalition government.
Many previous reforming Chancellors have benefited from a more benign fiscal outlook to facilitate fundamental fiscal reform (Nigel Lawson and Gordon Brown spring to mind). The daunting fiscal deficit means that any tax reforms must be achieved within a tax neutral framework; Geoffrey Howe’s Budgets in the early 1980s are a closer precedent but the need to accommodate both parties to the coalition agreement provides additional dilemmas in 2011.
– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –
By Peter Thal Larsen
Investment banks have reined in their worst pay excesses. But inconsistent enforcement of bonus rules in the United States and Europe means some are still getting away with bad behaviour. If banks and regulators can’t agree common standards, they risk another political backlash.
-Joanne Segars is chief executive at the National Association of Pension Funds. The opinions expressed are her own.-
Osborne delivered a tough and important budget, but one issue he didn’t really square up to was the UK’s woeful record on saving for retirement.
- Mark Bolsom is the Head of the UK Trading desk at Travelex Global Business Payments. The opinions expressed are his own-
Later today, Chancellor George Osborne will unveil his first budget, where he is widely expected to take a tough stance. To the financial markets, this emergency budget is the agenda-setting piece of this parliament. Markets, media, consumers and businesses alike have all braced themselves for what has been billed as the sharpest fiscal tightening since the end of the Second World War.
-Julia Whittle is head of International at Punter Southall Financial Management. The opinions expressed are her own. Join Reuters for a live discussion with guests as UK Chancellor George Osborne makes an emergency budget statement at 12:30 p.m. British time on Tuesday, June 22, 2010.-
It is highly unlikely previous Capital Gains Tax proposals will be reversed in Chancellor George Osborne’s first budget.
-Nick Earl is partner at chartered financial planners Wardour Partners LLP. The opinions expressed are his own. Join Reuters for a live discussion with guests as UK Chancellor George Osborne makes an emergency budget statement at 12:30 p.m. British time on Tuesday, June 22, 2010.-
On Tuesday we will hear the first budget from new Chancellor George Osborne.
From the snippets of information we have heard from the Lib-Con coalition camp, I do not anticipate this budget will show much sympathy for middle or high earners.