Algirdas Šemeta, EU Commissioner for Taxation, told the financial sector in London that the FTT will not damage the competitiveness of Europe's financial sector due to the tax's low rate, wide base and residence principle, and offers the financial sector with an opportunity to regain the trust of the general public.

The Commissioner acknowledged that the financial sector will have to adapt to the tax and readjust some of its practices, notably in the field of high frequency trading. However, “the FTT is a first step to re-building citizens’ confidence in the financial sector, by showing that the sector is making a fair contribution to public finances and the costs of recovery”.

According to the Commissioner, the FTT is expected to generate €10bn (£8.4bn) a year in the UK alone which can be used for the purpose of consolidating finances, investing in growth-promoting activities or contributing to global challenges like development and climate change. Mr Šemeta compared the FTT revenue to the estimated £14bn said to have been paid in bonuses in the City of London last year and asked if it was so outrageous to ask for a small contribution to public finances given the level of bonus payments.

Full details of the Commissioner's speech is available at http://ec.europa.eu/taxation_customs/common/about/speeches/index_en.htm