Investment - Articles - Financial Transaction Tax will be passed onto the consumer

 Commenting on Labour’s revenue raising proposal, Liz Field, Chief Executive, said: ‘PIMFA’s members, who manage investments and savings for UK retail investors and are a key source of personal wealth generation in the UK, rely on retail market makers to provide continuous two-way prices across a wide variety of tradeable instruments. These market makers provide liquidity and are ultimately the ‘oil’ that greases the wheels of the stock market which millions of UK investors rely on when they are building financial resilience for every-day life and retirement.

 Whilst we understand the logic behind these proposals, we believe that they are ultimately based on an outmoded caricature of those who operate in financial services. Ultimately, were Labour to bring in a financial transaction tax, the additional costs would end up being passed on to individual retail investors. We believe this runs counter to the broader aims of the Labour manifesto.

 ‘PIMFA has campaigned for the removal of Stamp Duty Reserve Tax and, before that, Stamp Duty for many years. The introduction of a Financial Transaction Tax, where both purchase and sale transactions attract a duty, is in our view a step in the wrong direction, away from encouraging retail share ownership. Whilst we welcome many of the proposals set out in this manifesto, this is ultimately one which benefits the few rather than the many.