Eurozone Crisis

Sheila Gilmore Excerpts

Thursday 27th October 2011 Commons Chamber

[Mr Osborne]

We would, of course, have been laughed out of the summit. We would not even have been able to sign up to the Council’s conclusions. The Labour party policy has no plan to reduce the deficit—[Interruption.] Well, if there is a plan, let us hear it. Let us hear one example. The Labour party has no plan to reduce our deficit, which is higher than that of almost any of the countries we have talked about. It has a plan basically to pull us out of the International Monetary Fund and a plan to join the euro—such plans would be treated as slightly bizarre at some of these meetings.

[Sheila Gilmore (Edinburgh East) (Lab)]

More constituents have contacted me about the financial transaction tax than ever contacted me about Monday’s debate. They will be pleased to have heard the Chancellor say that he supports this in principle. Will he go to the G20 to argue vigorously in favour of this tax?

[Mr Osborne]

What I would say about the financial transaction tax—[Interruption.] I am not sure that it is Labour policy. There is a debate about this tax, but attached to it is a serious red herring. People would like a financial transaction tax to be used to pay for the aid commitments into which big western countries entered. That is what all the non-governmental organisations that contacted the hon. Lady and others are arguing for. Britain is meeting its international aid commitments out of its own resources, and we do need a financial transaction tax across Europe for other countries to meet the aid commitments they entered into. When it comes to the principle of the financial transaction tax, one cannot oppose it, as we have a stamp duty on shares, but I would say that if we impose such a tax in Europe, all the business would disappear overnight to Hong Kong, Singapore and elsewhere. We know that because that is what happened when the United States imposed a form of transaction tax on the euro-dollar market—it moved to London—and when Sweden introduced a financial transaction tax in the early ’90s, its entire business moved to London almost immediately. We have many case-studies. I understand why people are emotive about this issue, but surely the question is, “Are you meeting your aid commitments?”—and this country is. We should all be proud of that.