§ Mr. SheermanTo ask the Chancellor of the Exchequer what discussions he has had with financial organisations on the(a) viability and (b) acceptability of the Tobin Tax initiative. [123179]
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§ Miss Melanie JohnsonThe Chancellor meets regularly with members of the international financial community to discuss a range of measures designed to reduce currency market instability.
The Government believe the Tobin tax idea is, in principle, interesting, but has a number of practical drawbacks. In particular, it could introduce serious economic distortions to the international financial system, and is unlikely to have much effect in a crisis. It would be practically impossible to achieve global coverage, and there would be huge scope for avoidance.