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| Version 1 | Version 2 |
|---|---|
| Lukewarm reaction to UK tax plan | Lukewarm reaction to UK tax plan |
| (20 minutes later) | |
| Prime Minister Gordon Brown's idea of a financial transactions tax has received a lukewarm response from G20 countries. | Prime Minister Gordon Brown's idea of a financial transactions tax has received a lukewarm response from G20 countries. |
| The proposal has overshadowed the agenda at the meeting in St Andrews. | The proposal has overshadowed the agenda at the meeting in St Andrews. |
| But the US Treasury said it would "not support" a transaction tax and Canada's finance minister said it was "not an idea we would look at". | But the US Treasury said it would "not support" a transaction tax and Canada's finance minister said it was "not an idea we would look at". |
| The Conservatives said that Downing Street had previously "poured cold water on this proposal" and that the Treasury had called it "unworkable". | The Conservatives said that Downing Street had previously "poured cold water on this proposal" and that the Treasury had called it "unworkable". |
| Chancellor Alistair Darling said the leaders had agreed the International Monetary Fund should now consider the possibility of introducing an international transactions tax, which would be used to create a fund for bank bailouts. | Chancellor Alistair Darling said the leaders had agreed the International Monetary Fund should now consider the possibility of introducing an international transactions tax, which would be used to create a fund for bank bailouts. |
| He said governments should consider whether it would be possible to develop a tax that would be universal, comprehensive in scope and compatible with financial stability, as well as fair and which would not "distort things". | He said governments should consider whether it would be possible to develop a tax that would be universal, comprehensive in scope and compatible with financial stability, as well as fair and which would not "distort things". |
| He described the idea as "clearly work in progress, it will take time to develop but it is, I believe, an important piece of work". | He described the idea as "clearly work in progress, it will take time to develop but it is, I believe, an important piece of work". |
| Tobin-type taxes don't work as they require perfect or near-perfect global implementation and assume no innovation Angela Knight, British Bankers' Association G20 vows to spur fragile growth | Tobin-type taxes don't work as they require perfect or near-perfect global implementation and assume no innovation Angela Knight, British Bankers' Association G20 vows to spur fragile growth |
| He later told the BBC: "To rule out any possibility of change on one day wouldn't be right. That's why all of us agreed... that the IMF should look at this further. | He later told the BBC: "To rule out any possibility of change on one day wouldn't be right. That's why all of us agreed... that the IMF should look at this further. |
| "But the objective of making sure that people who cause so much difficulty actually contribute and pay towards solving those problems - that must be right." | "But the objective of making sure that people who cause so much difficulty actually contribute and pay towards solving those problems - that must be right." |
| Mr Brown said a global levy on financial transactions was one of the ways to make banks pay but said the UK would not introduce such a tax unless other countries did so as well. | Mr Brown said a global levy on financial transactions was one of the ways to make banks pay but said the UK would not introduce such a tax unless other countries did so as well. |
| Other options, he said, were an insurance scheme, a global "resolution fund" or a contingent capital arrangement. | Other options, he said, were an insurance scheme, a global "resolution fund" or a contingent capital arrangement. |
| Idea rejected | Idea rejected |
| The UK has in the past been opposed to transaction levies, known as Tobin taxes, believing they could damage the interests of the City of London. | The UK has in the past been opposed to transaction levies, known as Tobin taxes, believing they could damage the interests of the City of London. |
| BBC chief economics correspondent Hugh Pym said the prime minister had given momentum to a controversial idea but that it was not clear how far it would run. | |
| And BBC Business correspondent Joe Lynam said the G20's agenda "was somewhat usurped by a very interesting verbal hand grenade thrown by the prime minister into the debate" by mention of the idea of a transaction tax. | |
| But the head of the IMF, Dominique Strauss-Khan, said he believed the transaction tax was unlikely to be adopted. | But the head of the IMF, Dominique Strauss-Khan, said he believed the transaction tax was unlikely to be adopted. |
| "I don't believe it will be a transaction tax because transactions are very difficult to measure and so it's very easy to avoid a transaction tax," he told Sky News. | "I don't believe it will be a transaction tax because transactions are very difficult to measure and so it's very easy to avoid a transaction tax," he told Sky News. |
| US Treasury Secretary Timothy Geithner dismissed the idea of such a tax, saying: "That's not something that we're prepared to support." | US Treasury Secretary Timothy Geithner dismissed the idea of such a tax, saying: "That's not something that we're prepared to support." |
| A financial transaction tax is part of the solution, along with measures to help developing countries retain the revenues they lose to tax havens Martin Hearson, ActionAid | A financial transaction tax is part of the solution, along with measures to help developing countries retain the revenues they lose to tax havens Martin Hearson, ActionAid |
| He told reporters: "This is an idea that has been around for a long time. Many countries have a lot of experience with the design of these kinds of taxes. I think, frankly, the experience has been mixed." | He told reporters: "This is an idea that has been around for a long time. Many countries have a lot of experience with the design of these kinds of taxes. I think, frankly, the experience has been mixed." |
| Canadian finance minister Jim Flaherty also rejected the proposal, telling Sky News it was "not something we would be interested in in Canada". | Canadian finance minister Jim Flaherty also rejected the proposal, telling Sky News it was "not something we would be interested in in Canada". |
| He added: "We are not in the business of raising taxes, we are in the business of lowering taxes in Canada. It is not an idea we would look at." | He added: "We are not in the business of raising taxes, we are in the business of lowering taxes in Canada. It is not an idea we would look at." |
| Charity support | Charity support |
| Russian Finance Minister Alexei Kudrin said: "I am a sceptic on such taxes. Gordon Brown is known for always raising taxes." | Russian Finance Minister Alexei Kudrin said: "I am a sceptic on such taxes. Gordon Brown is known for always raising taxes." |
| Angela Knight, from the British Bankers' Association, said: "Tobin-type taxes don't work as they require perfect or near-perfect global implementation and assume no innovation. | Angela Knight, from the British Bankers' Association, said: "Tobin-type taxes don't work as they require perfect or near-perfect global implementation and assume no innovation. |
| "Banks are willing to discuss a better intervention mechanism, and more capital to be held as an insurance is already on the table." | "Banks are willing to discuss a better intervention mechanism, and more capital to be held as an insurance is already on the table." |
| A Conservative spokesman said that Mr Brown appeared to be "chasing headlines". | A Conservative spokesman said that Mr Brown appeared to be "chasing headlines". |
| He added: "Six weeks ago Downing Street poured cold water on this proposal and the Treasury said it is unworkable - what has changed? | He added: "Six weeks ago Downing Street poured cold water on this proposal and the Treasury said it is unworkable - what has changed? |
| "Instead of empty headline-grabbing announcements Gordon Brown should focus on the crisis we are living through now which he helped to create, which means businesses are folding and insolvencies rising at record rates." | "Instead of empty headline-grabbing announcements Gordon Brown should focus on the crisis we are living through now which he helped to create, which means businesses are folding and insolvencies rising at record rates." |
| Charity appeal | |
| Although politicians have reacted against the new tax proposals, charities have expressed support for the idea. | Although politicians have reacted against the new tax proposals, charities have expressed support for the idea. |
| Martin Hearson, ActionAid's tax expert, said: "A financial transaction tax is part of the solution, along with measures to help developing countries retain the revenues they lose to tax havens." | Martin Hearson, ActionAid's tax expert, said: "A financial transaction tax is part of the solution, along with measures to help developing countries retain the revenues they lose to tax havens." |
| Max Lawson, Oxfam's senior policy adviser, said: "A tax on banks would be a major step towards clearing up the mess caused by their greed. | |
| "The G20 has a responsibility to act. Every minute around the world 100 people are forced into extreme poverty as a result of the economic crisis. Money raised by a financial transaction tax on banks could make a massive difference to the lives of ordinary people." | |
| Meanwhile, a statement issued after the G20 meeting says the global economic recovery is "uneven" and remains dependent on support, while unemployment is a "major" concern. | Meanwhile, a statement issued after the G20 meeting says the global economic recovery is "uneven" and remains dependent on support, while unemployment is a "major" concern. |