Corbyn’s UK tax plan alarms banks

The UK’s Labour Party has held a series of meetings with top finance executives, setting out how it would levy taxes on one of the world’s biggest financial trading centres if it snatched power from Prime Minister Theresa May.

With Ms May’s grip on the leadership weakened by an ill-judged election last month and her Conservative party divided over Brexit, Labour is hoping her minority government will collapse and catapult its socialist leader Jeremy Corbyn into power.

Last week, Labour’s finance spokesman John McDonnell chose the London Stock Exchange to invite feedback on proposals, telling leaders his party will form the next government, sources at the meeting said.

Banks in London’s financial hub had paid little attention to relations with the Labour Party since 2015 when members elected Mr Corbyn, a veteran campaigner who is seen as opposing much of what the City of London stands for.

But the industry has been forced to take the party seriously after its much stronger than expected showing in the general election which left Ms May to rely on the support of the DUP to prop up her government.

Mr McDonnell told executives from Standard Chartered, the London Stock Exchange, the City of London Corporation, lawyers, lobbyists, and accountants in two separate meetings last week about Labour’s proposals to expand an existing tax on shares to include trading on other assets such as bonds and derivatives.

Labour says the tax — proposed to be around half of a percentage point or less on the value of a trade — could earn £4.7bn (€5.25bn) a year.