MEPs support Europe-wide banks tax

Plans for a Europe-wide tax on banks has won overwhelming support from MEPs - and triggered a new attack on Chancellor George Osborne for not taking part.

Eleven EU countries have now agreed to go ahead with a tax on financial transactions between banks as a way of raising extra money to fund future bailouts.

And the support in a 533-91 vote in the European Parliament now leaves only endorsement from EU finance ministers needed before the European Commission tables formal proposals.

The call for an EU Financial Transactions Tax (FTT) was suggested by Brussels as the eurozone crisis deepened, partly to show that banks were sharing the bailout burden alongside taxpayers.

But Britain has been leading the opposition, insisting such a tax would have to apply globally to function fairly.

In June this year a bid to get a 27-nation EU agreement failed, with Mr Osborne defiant in the face of a deal to go ahead between an inner core of countries led by Germany and France. Some others shared Mr Osborne's view that an FTT would only work if adopted by all global financial centres.

The Chancellor insisted the tax could damage the City of London and hurt the wider European economy by encouraging the trade financial transactions to move to countries outside the EU.

"I would have thought we want to be attracting business rather than the other way around," he said.

The Robin Hood Tax Campaign welcomed MEPs' support for the tax and issued a new challenge to Mr Osborne.

"At a time when the country is faced with welfare cuts and increased austerity, it is incomprehensible that George Osborne continues to put the City profits before public good and turns down the opportunity to raise billions in much-needed revenue", said campaign spokesman David Hillman.