Britain loses fight against European court over financial transaction tax
The UKís legal bid to have an impending financial transaction tax waived has been dealt a huge blow today after a European Court rejected its request to block 11 countries from utilising the tax against workers in the city.
The European Court of Justice argued that the UK would be unable to block the tax as it yet to be fully implemented, with Chancellor George Osborne now being faced with a two pronged wave of criticism from both supporters and critics of the tax.
FTT supporters have argued that he has simply wasted time opposing a tax at the behest of the city elite, and FTT critics have said that the decision illustrates the governmentís inability to meaningfully protect the interests of countryís industry from external interference.
However, the Treasury has moved to downplay the decision, identifying their belief that they will still be able to legally challenge the tax when it is finally instigated.
However, UKIP leader Nigel Farage, has argued that the ruling clearly illustrates that the UK government is incapable of truly protecting the interests of the UK industry from external interference in Europe.
"The court dismisses the United Kingdom's action," the ECJ said in a statement. " ... the contested decision does no more than authorise the establishment of enhanced cooperation, but does not contain any substantive element on the FTT itself."
David Hillman, spokesperson for the Robin Hood Tax campaign, which is one of the organisations that supports the introduction of the FTT in the UK, has argued that the Chancellor has simply wasted time and money defending the interests of the city elite in the UK, instead of supporting a tax that could help raise billions for the countryís poor.
He said: "George Osborne has gone to Europe to bat for the bankers, but he's been bowled first ball.
"This futile legal challenge tells you all you need to know about the government's misguided priorities: it would rather defend privileged elite in the City than support a tax that could raise billions to tackle poverty and protect public services.
"Instead of trying to stop other countries taxing their financial sectors, our government should follow their lead, stand up to vested interests and harness the City's excessive wealth for the wider benefit of society.
"Complaining that the City will be hit by a European FTT is a clear case of double standards - almost half of the £3bn revenue from our own FTT, the stamp duty on shares, comes from non-UK residents."
Farage said: "This FTT judgement shows that the UK cannot act to protect the UK's biggest interest. It is impotent and at the mercy of an antagonistic federalist court ñ the ECJ.
"It shows Cameron's argument that the UK government can negotiate a better deal for British business from within the EU as a fraud and a farce. The only way to protect the UK financial interest is to withdraw from the tax-hungry EU and stop giving Brussels power over us."
A Treasury spokesperson said: "Today's decision confirms the UK will be able to challenge the final proposal for a financial transaction tax if it is not in our national interest and undermines the integrity of the single market. We risked not being able to do that if we had not made this challenge now.
"The government is determined to continue to ensure that the interests of countries outside of the single currency but inside the single market are properly protected as the euro area continues to integrate, including with any proposal for a financial transactions tax."
However, Unite general secretary, Len McCluskey, has hit out at the government for using taxpayers money to undertake the expensive legal action, highlighting that it is being done so at the behest of those responsible for the financial crisis in the first place- city workers and bankers.
He said: "George Osborne is forcing austerity on the British people so his friends in the City don't have to clean up the financial wreckage they caused.
"It's no surprise that the government has confirmed that it will challenge the European court of justice's decision just as the government is opposing the EU cap on bankers' bonuses in the courts.
"It's clear proof that this government will back spivs and speculators at the expense of our schools and hospitals. What should make the people of our country really angry is that this government will use our taxes to support legal challenges on behalf of the very people who wrecked our economy."
Katja Hall, CBI chief policy director, has argued that whilst criticisms of the legal procedure are not necessarily unfounded, that nevertheless they are masking the bigger issue of the inherent deficiencies with the tax, with its primary fault being that it will ìdamage growth, jobs and investment across Europeî.
She said: "This decision about legal procedure doesn't change the fact that the financial transactions tax will damage growth, jobs and investment across Europe.
"It will have a far-reaching impact on non-participating member states, by including extra-territorial reach into financial services activity conducted in the UK.
"As the UK's largest single trading partner, a healthy European economy is in everyone's interests so we urge that this damaging tax is re-considered