Shadow Chancellor Ed Balls says Britain needs a strong London and should stand up to the EU

November 01, 2011 3:27 PM

Ed Balls, the Shadow Chancellor of the Exchequer, yesterday spoke out for the need for a dynamic London economy as a vital part of nationwide prosperity, including a thriving financial sector and the City. He wrote in the London Evening Standard about the importance of the sector to the whole economy:

"Financial services must and will have a vital role to play in London and Britain's economic future. That is why I am determined that the City of London remains on the world's most successful financial centres... Yes, we need radical reforms to the banking system to protect customers and taxpayers and support the wider economy. But we must also get the balance right and ensure reforms are pursued internationally to protect the hundreds of thousands of British jobs dependent on financial services. And we must stand up for Britain's interests in the European Union".

There's plenty to stand up against, both in the European Union and in Westminster, too.

From Brussels the impending spectre of a 'financial transactions tax' threatens to destroy many wealth creating transactions while driving most of the others out of Europe and London. Meanwhile the Alternative Investment Fund Managers Directive looks like it might drive more hedge funds and private equity businesses out of London into less bureaucratic competitors while also resulting in higher charges for pension funds. That means bigger pension fund deficits and lower pensions.

The picture from Westminster isn't much better for the City. The Bank Levy, high Corporation Tax and the punitive 50p rate of Income Tax, which probably doesn't even raise any revenue for the Treasury, are all hitting London hard. Taxes and regulations like these pile up the costs that are steadily driving financial businesses and the jobs and prosperity they support out of London. The City of London, and the whole country too, needs fewer and smarter regulations and lower and simpler taxes.

Fundamental tax reforms like our recent proposal to abolish National Insurance and merge it into Income Tax are what Britain needs if the Government genuinely wants a pro-growth, pro-enterprise transparent tax system.Ed Balls, the Shadow Chancellor of the Exchequer, yesterday spoke out for the need for a dynamic London economy as a vital part of nationwide prosperity, including a thriving financial sector and the City. He wrote in the London Evening Standard about the importance of the sector to the whole economy:

"Financial services must and will have a vital role to play in London and Britain's economic future. That is why I am determined that the City of London remains on the world's most successful financial centres... Yes, we need radical reforms to the banking system to protect customers and taxpayers and support the wider economy. But we must also get the balance right and ensure reforms are pursued internationally to protect the hundreds of thousands of British jobs dependent on financial services. And we must stand up for Britain's interests in the European Union".

There's plenty to stand up against, both in the European Union and in Westminster, too.

From Brussels the impending spectre of a 'financial transactions tax' threatens to destroy many wealth creating transactions while driving most of the others out of Europe and London. Meanwhile the Alternative Investment Fund Managers Directive looks like it might drive more hedge funds and private equity businesses out of London into less bureaucratic competitors while also resulting in higher charges for pension funds. That means bigger pension fund deficits and lower pensions.

The picture from Westminster isn't much better for the City. The Bank Levy, high Corporation Tax and the punitive 50p rate of Income Tax, which probably doesn't even raise any revenue for the Treasury, are all hitting London hard. Taxes and regulations like these pile up the costs that are steadily driving financial businesses and the jobs and prosperity they support out of London. The City of London, and the whole country too, needs fewer and smarter regulations and lower and simpler taxes.

Fundamental tax reforms like our recent proposal to abolish National Insurance and merge it into Income Tax are what Britain needs if the Government genuinely wants a pro-growth, pro-enterprise transparent tax system.

Latest Blogs:

TaxPayers' Alliance Icon

The sugar tax and the public finances

6:00 AM 05, Dec 2016 Harry Fairhead

TaxPayers' Alliance Icon

Working for the taxman

6:00 AM 26, Nov 2016 Harry Fairhead

TaxPayers' Alliance Icon

Further thoughts on the Autumn Statement

4:56 PM 24, Nov 2016 James Price

TaxPayers' Alliance Icon

Have we had too much austerity?

10:57 AM 23, Nov 2016 Alex Wild