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.

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.