Local MEP speaks out against EU transaction taxes.

The European Parliament opened for 2012 with a debate on the proposals to tax financial transactions across the EU. The proposals have already been criticised by the UK government but have been supported by the French President, Nicolas Sarkozy and German Chancellor, Angela Merkel.

East of England MEP, Vicky Ford spoke in the debate about her concerns.

She said "2012 needs to be a year of focusing on growth for the UK and Europe. However even the European Commission´s own analysis says this tax could reduce growth by 1.7% every year.

I can understand why many want to see increased taxes on financial institutions and whilst I´m not against taxing financial services the way this tax is structured will allow financial players to relocate overseas - taking jobs with them.

The tax burden will fall on investors such as pension funds, real businesses and insurance companies. We need investment in the UK and Europe, indeed we should think about giving long term investors tax incentives not additional tax penalties.

Pensioners could be hit especially hard by this tax. Some people say that the proposed charge of 0.1% is "tiny" but when long term interest rates are only 2% every single trade could cost a pension fund a tenth of its annual income. That is a huge amount of money especially for many pensioners.

This is not just an issue for those in the City of London, or indeed those who commute into London for work. It will affect our insurance premiums, pension savings and the investment in real companies which create jobs. The UK is right to veto this tax."

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