Parliament & Politics: Lord Mayor's warning on tax

EU HARMONISATION

PLANS TO harmonise the withholding tax on savings income across the European Union would be "highly damaging" to its standing in the world financial markets and could drive business offshore, the Lord Mayor of London, Lord Levene of Portsoken, said yesterday.

But Lord Levene, a crossbencher and chairman of Bankers Trust International, praised the Government for its determination to veto a draft directive, which would apply across the EU to savings income and to the eurobond market. "The rules for the single market must be drawn up so that Europe's financial business generally is not driven offshore and outside Europe altogether."

In the Lords, he urged the Commission and the EU presidency to "seek worldwide agreement on such changes first... That is the only way to avoid the damage across Europe that they would otherwise bring."

He added that the City Corporation would be introducing a Bill to reform the electoral system in the City, "to give the world's leading international centre the best and most efficient local government ... anywhere in the world".