EU Transaction Tax

On 28 September the European Commission published a proposal for the introduction of a Financial Transaction Tax. France and Germany, the biggest members of the EU have endorsed the plan whilst the United Kingdom is strongly opposed to the tax as this will have a disproportionate impact on the country with the largest financial services center in Europe. 

It is proposed that a 0.1% tax will be imposed by EU member states on bonds, shares and other derivative transactions. Under current levels, the scheme will raise €57 billion in tax in a bid to combat the Euro crisis and restore the coffers of the ECB which have been depleted following the bailing out the failing EU member states. 

The proposal will require unanimous support from all EC member states before it can be implemented. Whether the transaction tax will receive the required support remains to be seen. Clearly a financial transactions tax will have a negative impact on the UK economy and hence it is strongly opposed in this country. However, any move to introduce the transaction tax will have interesting consequences for both traders and the banks as it could impair their ability to manipulate the stock markets through the use of sophisticated computer programmes. This could have a positive effect for small independent traders if it serves to filter out the inefficient big players in the market. Angela Merkel has already attempted to outlaw speculative short selling of the Euro and is clearly concerned about manipulation in the market.

Virgin Money Acquires Northern Rock

Virgin Money acquired Northern Rock for a cut price £747m in November 2011. The acquisition has received heavy criticism as the bank was only recently subject to a bail out by the UK taxpayer. Virgin have also been criticised for offering only a narrow range of products to consumers. 

Virgin Money are pledging an end to hidden costs and offer the promise of “free” banking.

Public Sector Strikes over Pension reform in the UK

The 30^th of November saw public sector strikes in the UK over the proposed pension reform in the UK.  An estimated 2 million public sector workers including teachers, nurses and civil servants voiced their concerns over the government proposals and demonstrated throughout the day.

The bitter dispute surrounds the Coalition’s proposal to increase the level of contributions for public sector workers together with an increase in the retirement age. This sparked anger amongst public sector workers who also face the prospect of a wage freeze next year despite rising inflation.

The UK government explain that the proposal is justified in order to manage the funding gap in the Budget deficit but once again it seems like the hard working public sector staff will bear the brunt of previous mistakes by those in power. The trade unions have expressed concern that the additional contributions proposed will exceed the value of pensions paid out on retirement and that this is in fact another stealth tax where the sums do not add up.

In a Bizarre statement to the press, Top Gear presenter Jeremy Clarkson sparked further outrage by claiming that public sector workers involved in the strike should be shot. He was forced to apologise after his astounding comment and explained that this was intended as a joke. The sad news is that at this rate teachers are unlikely to be able to afford to buy a car and so the risk of a boycott of Top Gear is minimal!