Belfast Telegraph

Sunday 21 September 2014

Cameron warns France over banks tax

French president Nicolas Sarkozy has vowed to introduce a financial transactions tax if he is re-elected (AP)

David Cameron has warned France that the UK could reap the benefit if it went ahead with a national levy on bank transactions to help pay for the economic crisis.

He said Britain's door would be open to any French banks wishing to leave the country to avoid paying the Financial Transactions Tax (FTT) that French president Nicolas Sarkozy has vowed to introduce if he is re-elected in May.

The Prime Minister and Chancellor George Osborne have insisted the FTT can only function if is applied globally, to ensure a level playing field in the banking sector. They have refused to take part in such a tax at EU level for fear of driving European banks to trade outside the union's jurisdiction.

Mr Cameron said in Davos last week that the decision by President Sarkozy to introduce such a tax without even the support of the rest of the EU was "mad".

On Monday night, after a summit of the 27 leaders in Brussels, Mr Cameron hit back at a Sarkozy jibe that France had a bigger, more thriving industrial sector than the UK.

The Prime Minister said President Sarkozy was a "remarkable" man for whom he was "full of admiration". London and Paris had rarely worked more closely together than on the Libyan crisis, he pointed out, but they did not agree on everything.

For instance, Mr Cameron explained, when the French president said the UK was short on industry, "well, we have a larger industrial sector than France, but we'll gloss over that". He went on: "We are rebalancing the economy, seeing the growth of manufacturing technology, pharmaceuticals: there are great British companies in those sectors, and there are great automotive sector investing in Britain, Honda, Toyota, Jaguar, Land Rover."

Mr Cameron acknowledged he had called the Sarkozy plan for an FTT "mad" and continued: "I do think it's an extraordinary thing to do, when the European Commission itself says that this will cost half a million jobs - when we are fighting for jobs".

But the Prime Minister made clear the UK would try to capitalise if the French FTT was introduced in France. "If France goes for it, then the door will be open to many more banks from France, and we would welcome them to the UK," vowed Mr Cameron.

Besides, he concluded there were other ways to raise taxes on banks. "We have stamp duty on share dealings, as well as the bank levy - and the point is that unless the Financial Transactions Tax is done everywhere, it simply drives (bank) business to those jurisdictions that don't have it," he said.

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