VIDEO • MEPs Nigel Farage, Graham Watson and Rebecca Harms were hosted by the BBC'sThe Record Europe (02.07.2011) to discuss the Commission's recent proposals on introducing a tax on financial transactions.
UKIP Leader Nigel Farage argued that this will be the first time a direct EU tax is being introduced, and since raising taxes is a function of the state, the EU will be acting as a state.
Moreover, "if the EU goes for a financial transaction tax you will find that insurance, foreign exchange, commodity business - genuine business that industry needs to survive - will move" elsewhere outside the Union, such as Zurich, Bermuda, New York or Singapore.
London is the only global financial centre in the EU and this sector contributes close to 20% of the UK's tax revenues, Nigel Farage said.
Rebecca Harms said this tax will control the financial sector and the greed for big and fast profits by the banks. This will help pay our way out of the crisis, she said.
Nigel Farage agreed with Harms that banks were very much part of the cause of the crisis, "but let's not crucify our genuine financial transaction business for that reason," he said.
"I think there's been a deliberate confusion put out by politicians that banks and financial services are one and the same thing and they're not."
Graham Watson pointed out that there are various possibilities for EU taxation, but not all taxes are easy "to collect and police," and this one is. He added that we've had indirect EU taxes since the 1970s, so it is now time to introduce direct EU taxation.
Nigel Farage disagreed. Countries contributing a proportion of their VAT to the EU is not the same as the EU collecting its own taxes at source.