HC Deb 24 June 1999 vol 333 cc457-8W
14. Sir Michael Spicer

To ask the Chancellor of the Exchequer what his policy is on the proposals for a European withholding tax. [87070]

19. Mr. Loughton

To ask the Chancellor of the Exchequer if he will make a statement on the European Commission's proposal for a council directive to ensure a minimum of effective taxation of savings income in the form of interest payments within the Community. [87075]

Dawn Primarolo

The Government will not accept the draft directive on Savings in its current form because of its likely impact on our financial markets, particularly the Eurobond market. The ECOFIN Council and the European Commission have come to accept our case, agreed a further review and asked us to submit our proposals for excluding the Eurobond market.

We have received a number of representations from both individuals and City Institutions who share our concern to protect the interests of the UK financial markets. We welcome dialogue and are continuing to work closely with the City.

27. Mr. Syms

To ask the Chancellor of the Exchequer what assessment HM Treasury has made of the effects of the proposed European withholding tax on the financial sector in London. [87084]

Dawn Primarolo

The treatment of international bonds as provided for under the draft European Commission Directive on the taxation of savings risks serious damage to the competitiveness of EU financial markets, in particular wholesale markets. The current draft Directive is therefore unacceptable to the UK.