G20 - 7th November 2011

15:37 The Prime Minister (Mr David Cameron)

On the financial transactions tax, I have been clear all along that we are not opposed in principle to such a tax if one could be agreed at the global level, but we will not unilaterally introduce a new financial transactions tax in the UK. Neither will we support its introduction in the European Union unless it is part of a global move. Britain has introduced a bank levy and we are meeting our global agreements on overseas aid. If other countries want to introduce new financial taxes at home, including to raise revenue for development, that is for them to decide. What they should not do is try to hide behind proposals for an EU tax as an excuse for political inaction on meeting targets, whether they be for spending on development or, indeed, climate change.

The current proposals for a financial transactions tax in Europe are so deeply confused that different European countries, and indeed European institutions, have talked about spending the revenues of such a tax in five different ways: on development, on climate change, on social policy, on resolving the banking crisis, and, most recently, as the best way to supplement the EU budget. I have to say that that would be a bit of a stretch even for Robin Hood.

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15:58 Glenda Jackson (Hampstead and Kilburn) (Lab)

Is it really in the best long-term interests of this country for the Government consistently to present the United Kingdom as the neighbour from hell with regard to the European Union—not least with regard to the Tobin tax? The issues on which the European Union wishes to spend money are the issues on which the Prime Minister’s constituents and mine, and citizens around the world, wish to see money spent—not least on alleviating suffering in the third world and on climate change. Will he change his mind on this issue?

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15:59 The Prime Minister

With great respect to the hon. Lady, this Government—and to an extent the Governments whom she supported—have made and kept promises about things that our constituents care about, such as development and climate change. We are meeting those. As for being a good neighbour, one of the most unneighbourly acts someone could perform when the whole world is looking at growing the resources of the IMF to safeguard the global economy is to walk away from that and vote against it—something that I know that quite a lot of Labour MPs, probably including some on the Front Bench, are rather ashamed of. Such an act would show them to be not only not a good neighbour, but on another planet.

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The Prime Minister

I spoke on the financial transaction tax at the session where it was discussed and said that we supported it at a global level. I made a few of the points that I have made in the House today because sitting around the table were the representatives of European countries and institutions, including the European Commission, that have spent this money several times over. When we talk about the European budget, such a tax is given as the great way to raise money for that; when we talk about development, it is given as the way that we will pay for development; when we talk about climate change, it suddenly becomes the magic way to meet all our climate change commitments. Frankly, I do not think that we should allow other European countries to get away with that.

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