|Previous Section||Index||Home Page|
The Economic Secretary to the Treasury (Ed Balls): : The Government are today announcing three steps to modernise the tax system to remove obstacles to competition and expand choice in trading financial instruments in the UK. They will allow firms to benefit from the new opportunities offered by liberalisation of financial regulation in the European Union, and specifically from the introduction of the Markets in Financial Instruments Directive (MiFID).
First, from November 2007, the Government will no longer require transactions in shares admitted to trading on a regulated market under MiFID to be reported to that market, or those intermediaries to be members of that market, in order for intermediaries to benefit from stamp duty relief. Currently, relief from stamp duty is available for intermediaries that trade securities listed on the main market of the London Stock Exchange (LSE) only if they are members of the LSE and they report their trades to the LSE. This will allow new providers of transaction reporting services to enter the market more easily. The Government are today publishing draft clauses for consultation in advance of this years Finance Bill.
Second, the Government are announcing that, in addition to shares admitted to trading on a regulated market, it also intends to extend this approach to include shares admitted to trading on a Multilateral Trading Facility (MTF). Currently, in order to benefit from stamp duty relief, intermediaries trading in such securities are required to report transactions to the market on which the securities are admitted to trade. The Government intend to remove this requirement, in order to further extend choice in transaction reporting. However, before proceeding with this proposal, the Government are providing time for the Financial Services Authority to consider fully any possible regulatory implications from this change and will provide an update on progress at the Pre-Budget Report.
Third, the Government also propose to modernise the definition of a Recognised Stock Exchange for tax purposes to allow shares traded on other regulated markets under MiFID to benefit from the same tax arrangements that currently apply only to the LSE in the UK. For example, this will allow shares listed by the UK Listing Authority and traded on a regulated market under MiFID to be held in an Individual Savings Account or to meet the listing requirement to be a UK Real Estate Investment Trust. The Government will publish draft clauses in advance of this years Finance Bill.
The Government have been a leading proponent of the need to improve competition and efficiency in Europes securities markets for three reasons. First, to ensure that capital markets play their full role in financing the long-term investment needs of the wider economy as efficiently as possible. Second, to liberalise the provision of services to trade financial instruments within the EU so that successful firms and financial centressuch as Londoncan benefit from these opportunities within the European Single Market. Third, to ensure that the UKs markets and related services remain competitive internationally.
The Government have supported the introduction of greater competition through MiFID. The UK is the only major financial centre in the European Union to transpose the MiFID by the deadline of 31 January. This gives UK-based financial firms the maximum time to prepare for the impact of the new trading environment.
Todays announcement remove other unnecessary non-regulatory obstacles to greater competition in
trading financial instruments by modernising the tax system to bring it closer into line with the liberalised regulatory environment.
These announcements today coincide with an informal meeting of the High Level Group on City competitiveness, during which senior figures from the UK-based financial services sector met European Commissioners Charlie McCreevy and Neelie Kroes to discuss the future direction of financial services policy in Europe, including developments in trading securities.
The Parliamentary Secretary, Cabinet Office (Mr. Pat McFadden): Subject to parliamentary approval of any necessary supplementary estimate, the National School of Government departmental expenditure limit (DEL) will be increased by £1,636,000 from £640,000 to £2,276,000 and the administration costs limit will be £2,276,000. These figures reflect a take up of end year flexibility following NSG's transfer from the Cabinet Office. Within the DEL change, the impact of resources and Capital are as set out in the following table:
|*The total of the 'Administration Budget' and the 'Near cash in Resource DEL' figures may well be greater than the total resource DEL, due to definitions overlapping. **Capital DEL includes items treated as resources in Estimates and Accounts but which are treated as Capital DEL in Budgets. ***Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.|
The Minister for the Cabinet Office (Hilary Armstrong): Subject to parliamentary approval of any necessary supplementary estimate, the Cabinet Office departmental expenditure limit (DEL) has increased by £93,200,000 from £379,380,000 to £472,580,000. Capital DEL includes capital grants treated as resource in Estimates and accounts but which are treated as Capital DEL in budgets. The administration cost limits will be decreased by £351,000 from £219,392,000 to £219,041,000. Within the DEL change, the impact on resources and capital are as set out in the following table:
|(*)Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.|
The change in the resource element of the DEL arises from: Transfers from Security and Intelligence Agencies for their contribution towards BBC monitoring project, Scope programme and CSIA project; a Reserve transfer for V matched funding; a Reserve transfer for the funding of Retail Enforcement and Local Better Regulation within the Better Regulation Executive; a transfer from HM Treasury to Cabinet Office for the salaries and pensions of UK members of the European Parliament. Other changes in the resource element of the DEL arises from transfers to Deputy Prime Ministers Office to cover DPMOs accommodation costs (these costs will be recovered by invoice), and to the Department for Communities and Local Government (DCLG) for Third Sector work.
The changes in the capital element of the DEL arises from a drawdown of End Year Flexibility (EYF) from the Capital Modernisation Fund to cover funding requirements for the SCOPE programme and Cabinet Office security and investments projects/programmes and a transfer of End Year Flexibility from the Home Office in respect of the Office of the Third Sector Futurebuilders Capital grant programme.
Subject to parliamentary approval of any necessary supplementary estimate, the Charity Commission total DEL will be increased by £550,000 from £30,992,000 to £31,542,000. Within the DEL change, the impact on resources and capital is as set out in the following table:
|(*)The total of Administration Budget and Near cash in RDEL figures may well be greater than total resource DEL, due to the definitions overlapping.|
|(**)Depreciation, which forms part of resource DEL, is excluded from the total DEL since capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.|
|Next Section||Index||Home Page|