HC Deb 23 January 2003 vol 398 cc424-5
6. Mr. Adrian Flook (Taunton)

What recent representations he has received on the effect of Government policy on competitiveness of the financial services provided by the City of London. [92738]

The Financial Secretary to the Treasury (Ruth Kelly)

The Treasury regularly receives representations from many sources about the effect of Government policies on the competitive position of the City of London's financial services industry. The agreement on the taxation of savings secured in Brussels earlier this week by my right hon. Friends the Chancellor and the Paymaster General is a clear demonstration of the positive role that the Government are playing in championing the City.

Mr. Flook

The Minister forgot to mention stamp duty on share transactions. In a globalised market, the City of London operates as a major financial centre, yet that duty affects only British companies, as well as impacting on the value of any individual's pension to a total of £8,000. Will the British Government help to level the field for British companies, and more importantly, help pensioners after the imposition of the disastrous pensions tax introduced by the Chancellor and abolish stamp duty?

Ruth Kelly

I understand the point that the hon. Gentleman is making, but perhaps he could explain to the House why during 18 years of Conservative government, his party did absolutely nothing to reduce or remove stamp duty on shares. Perhaps he could also explain to the House how he would propose to raise the £3 billion revenue—

Mr. Speaker

Order. It is for the Minister to explain the policies of the Government.

David Taylor (North-West Leicestershire)

Is it not the case that, since 1999, about a third of the international financial service transactions denominated in euros have been carried out in the City of London? Does that not highlight the views of those of us in Labour Against the Euro that the siren voices on the Labour Benches and the eurozealots among the Liberal Democrats are wrong to suggest that membership of the euro is necessary for a successful financial services industry?

Ruth Kelly

The City of London has performed well since the euro was launched. We strongly welcome that. Indeed, it reflects the City's hard work and preparation, with the co-operation of the Bank of England, before the launch. My hon. Friend should be patient and wait for the assessment of the five economic tests, which, as my right hon. Friend the Chancellor has often said, will be published by the end of the first half of this year.

Dr. Vincent Cable (Twickenham)

How does the Financial Secretary respond to the controversial suggestion by the chairman of the London stock exchange that maximum harmonisation of financial regulation and minimum national discretion is the best way in which to preserve the City's competitiveness in Europe?

Ruth Kelly

I have not heard the comments of the chairman of the London stock exchange, but the Government and the majority of participants in the City do not share the view that the hon. Gentleman outlined. We strongly believe that fair tax competition is the way forward. That is why I emphasised the importance of the agreement that was secured earlier this week and sets a new agenda for sharing information on taxation matters.