Well, he is the EU tax Commissioner, so I guess for Lithuanian Algirdas Semeta, tax never went away. But that’s pretty much where he started his speech on Friday morning (sorry, busy weekend) to the City lawyers and finance workers assembled to discuss the EU’s proposals for a Financial Transactions Tax. He and I were the only people on the panel who argued the case for an FTT, and I thought he was pretty polished (code, of course, for better than me!) He argued his corner, arguing for a tax which would help re-balance the economy, promote growth and development, and address climate change. And he nimbly rebutted the arguments of those who claimed London would lose its finance sector if an FTT was implemented, quipping:
“London is not a world financial centre because of tax breaks.”
But his main message – and mine too, because at the start I was in conciliatory mood, was that people from the financial sector who see faults in the current design of the EU’s proposal – like the British Government – should be helping to design it better rather than just attacking it. Or, he could have added, trying to walk away in the hopes that it will never happen, or that it won’t touch trading in London, because in both cases, it so will.
However, I am getting really tired of hearing well-heeled and well-remunerated bankers telling me they’re against a 0.05% FTT because of the poor pensioners who will have to pay it out of their pension funds. As one panellist pointed out, the hedge fund that runs their personal pension is always keen to say how much of the Stamp Duty is being passed on, but they are strangely silent when it comes to the management fees that pay for the inflated salaries, bonuses and all the rest of the finery that was, as usual, on show in the lavish offices of the top City firm that provided the venue.
Some insiders suggest that the administrative costs of pension funds now run to as much as 40% – so for every £1 paid in to the fund, 40p is taken in charges and administration. That’s 800 times the amount of a Robin Hood Tax payment on the same sum.