November 21, 2019 / 11:27 AM / 16 days ago

Socialism in the City: UK Labour's plans for the finance industry

BIRMINGHAM, England (Reuters) - Britain’s opposition Labour Party published its election manifesto on Thursday, including plans for higher taxes to raise billions of pounds for more public spending and tougher regulation of London’s huge financial services industry.

Leader of the Labour Party Jeremy Corbyn holds his party's general election manifesto at its launch in Birmingham, Britain November 21, 2019. REUTERS/Phil Noble

Below are some of the policies:

FINANCIAL TRANSACTION TAX

Labour will expand Britain’s existing financial transaction tax on shares to trading in other assets, including foreign exchange, interest rate derivatives and commodities.

The tax will be based on who does the trade rather than where the transaction takes place.

Labour says the tax may raise 8.8 billion pounds ($11 billion) in 2023-2024 and will reduce trading volatility.

CORPORATION TAX

Labour will increase the main rate of corporation tax from 19 to 21% by next year, raising an extra 2 billion pounds. The tax will rise to 26% by 2022.

The party will also review corporate tax reliefs with a view to reducing them by 4.3 billion pounds.

COMPANY TAKEOVERS

Labour will introduce a broader “public interest” test to stop hostile takeovers “destroying treasured home-grown” industries.

NATIONAL INVESTMENT BANK

It promises to create a National Investment Bank to deliver 250 billion pounds of lending to tackle what it calls the failure of the banking system to provide longer-term funding for small and medium-sized enterprises.

BANK BRANCHES

Labour say they will change the law so that banks cannot close a branch where there is a clear local need for one and will ban charges on withdrawing money from cash machines.

Banks have faced criticism over branch closures with politicians saying they are damaging small businesses, while campaigners say they disadvantage vulnerable people less able to use online banking services.

BREAKING UP ACCOUNTING FIRMS

Labour will force accounting companies to separate their audit and consulting businesses and will impose more robust rules on auditors.

GREEN FINANCE

Labour will de-list firms from the stock exchange that fail to take adequate steps to deal with climate change and encourage financial watchdogs to promote green investments.

ROYAL BANK OF SCOTLAND

Labour has previously said it will halt the privatisation of Royal Bank of Scotland if it comes to power.

RBS remains 62%-owned by taxpayers after a 45 billion-pound bailout in the 2008 financial crisis, although the government has conducted two share sales as it looks to return it to private ownership.

Labour did not mention halting the privatisation of RBS in its manifesto.

Reporting by Andrew MacAskill and Huw Jones; editing by Stephen Addison

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