* House of Lords urge close scrutiny of stamp duty plans too
* EU finance ministers to debate tax in Copenhagen
* Advocates fear tax plan already in the dustbin
By Huw Jones
LONDON, March 30 Britain must veto European
Union plans to tax financial transactions as they are flawed and
would likely prompt banks to relocate, a UK lawmakers' report
said on Friday.
The bloc's executive European Commission has proposed a tax
on derivative, stock and bond trades to raise up to 57 billion
euros ($75.7 billion) from 2014 to make banks pay for economic
damage from the financial crisis.
Much of the money would be collected in London, the EU's
biggest financial centre, but the report from the House of Lords
said such a tax would not meet its stated objectives.
"There is a significant likelihood that financial
institutions will relocate outside the EU in order to avoid the
tax," the report said.
The UK has already said it won't sign up, effectively
killing a pan-EU tax, as unanimity is needed among the 27 member
states to bring into law what British finance minister George
Osborne has described as a bullet aimed at the heart of London.
Germany and France hoped for a transaction tax in the
17-nation euro zone, but this also looks unlikely after the
Netherlands came out against.
German Finance Minister Wolfgang Schaeuble conceded for the
first time on Monday that even a euro zone tax was doomed,
saying: "We just can't get it done." [ID:nL6E8EQ743}
EU finance ministers are due to discuss how to move forward
when they meet on Friday and Saturday informally in Copenhagen.
The focus is already switching to the possible introduction
of national stamp duties on share transactions, which Britain
already has and which France is set to follow in August.
The UK House of Lords report said the government should
still seek to influence this development as stamp duties in
different countries may have consequences for Britain.
"The implications for the UK and the EU as a whole are
considerable, and we urge the Government to redouble their
efforts to ensure that the UK is able to influence the ongoing
debate," the report said.
Sony Kapoor of think tank Re-Define told the lawmakers that
if other EU states introduced stamp duties, Britain could lose
its relative "first-mover advantage".
Brussels has said that if the EU set an example with a
"Tobin Tax" or "Robin Hood Tax", as it is also referred to by
advocates, other countries would follow.
"Given the opposition to an FTT in the USA, the suggestion
that the Commission proposal will pave the way for a global tax
is in our view wholly unrealistic," the lawmaker report said.
A report from Corporate Europe Observatory (CEO) released on
Thursday said the financial industry had been successful in
mounting a "full scale scaremongering lobby" against the tax.
"With the proposals now to be decided by the EU Council,
which requires unanimity on taxation issues, Europe's financial
transaction tax looks destined for the dustbin," said CEO, which
tracks EU-focused lobbying.