60 per cent of FTT revenues would come from Britain (even if we "opted out")

An interesting note from Ernst & Young's ITEM club outlook has been going around today. It's from way back in February, but I can't find anything that contradicts it since:

The European Commission (EC) has not published detailed revenue estimates of the FTT at a national level, but the EC acknowledges they would be distributed unevenly in line with trading volumes at EU exchanges. The Ernst & Young ITEM Club has used the information provided by the Commission to consider the impact on the UK in two scenarios, the introduction of the FTT across the EU including the UK and the scenario if the UK opts out. 

[Neil Blake, senior economic adviser to the Ernst & Young ITEM Club] comments: “Taking the EC’s estimates at face-value, if the FTT is introduced across the EU, the UK financial sector would generate around 75 per cent of the total revenues.

“However, even if the UK were to opt out of the FTT, if a reverse charge mechanism was applied, we expect the UK financial sector would still contribute around 60 per cent of total revenues. Moreover, these revenues would flow directly to governments in the Eurozone rather than to the UK Exchequer.”

The financial transaction tax has been rather on the back foot in recent months. The eurocrisis has moved far beyond the level where simple government revenues could be imputed as a possible solution, while the debate in Britain was derailed by the veto-that-never-was. Most of the debate this summer, including on this blog, has focused on the tax's behavioural effects, particularly with regard to high frequency trading.

But the revenue benefits of the tax shouldn't be forgotten. There's a lot of trading which isn't HFT, and which will go on largely unaffected by a transaction tax. And if 60 per cent of the revenue would come from Britain, that's quite a lot of money which the Government wants to leave on the table. 

 

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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How tribunal fees silenced low-paid workers: “it was more than I earned in a month”

The government was forced to scrap them after losing a Supreme Court case.

How much of a barrier were employment tribunal fees to low-paid workers? Ask Elaine Janes. “Bringing up six children, I didn’t have £20 spare. Every penny was spent on my children – £250 to me would have been a lot of money. My priorities would have been keeping a roof over my head.”

That fee – £250 – is what the government has been charging a woman who wants to challenge their employer, as Janes did, to pay them the same as men of a similar skills category. As for the £950 to pay for the actual hearing? “That’s probably more than I earned a month.”

Janes did go to a tribunal, but only because she was supported by Unison, her trade union. She has won her claim, although the final compensation is still being worked out. But it’s not just about the money. “It’s about justice, really,” she says. “I think everybody should be paid equally. I don’t see why a man who is doing the equivalent job to what I was doing should earn two to three times more than I was.” She believes that by setting a fee of £950, the government “wouldn’t have even begun to understand” how much it disempowered low-paid workers.

She has a point. The Taylor Review on working practices noted the sharp decline in tribunal cases after fees were introduced in 2013, and that the claimant could pay £1,200 upfront in fees, only to have their case dismissed on a technical point of their employment status. “We believe that this is unfair,” the report said. It added: "There can be no doubt that the introduction of fees has resulted in a significant reduction in the number of cases brought."

Now, the government has been forced to concede. On Wednesday, the Supreme Court ruled in favour of Unison’s argument that the government acted unlawfully in introducing the fees. The judges said fees were set so high, they had “a deterrent effect upon discrimination claims” and put off more genuine cases than the flimsy claims the government was trying to deter.

Shortly after the judgement, the Ministry of Justice said it would stop charging employment tribunal fees immediately and refund those who had paid. This bill could amount to £27m, according to Unison estimates. 

As for Janes, she hopes low-paid workers will feel more confident to challenge unfair work practices. “For people in the future it is good news,” she says. “It gives everybody the chance to make that claim.” 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.