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EU boss rules out Brexit deal for City

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The man in charge of Europe’s economic policy has written off the chances of Britain’s financial services sector getting its own Brexit deal.

Speaking exclusively to Sky News, Pierre Moscovici, Europe’s Commissioner for Economic and Financial Affairs, said: “One thing is obvious – being inside the EU cannot be the same as being outside.

“It will have consequences on our relationship.
“We will need to co-operate on many things – trade, customs, defence – but you cannot pick and choose.
“There will have to be changes, including for the financial services.”
There have been widespread calls for the City to be given its own particular deal, based on the fact that London is, by far, the biggest centre for financial services in Europe.
Companies across the continent use London as a way of raising finance.
Mr Moscovici said he had heard many appeals for “a special deal” but said that he wanted to come up with an agreement that worked across multiple sectors, rather than prioritising some above others.
“It needs to be a global agreement,” he said.

Image: The City of London is home to the UK’s financial services sector
Mr Moscovici has been fighting a long battle to raise more tax revenue from multinational companies, particularly American digital giants such as Apple, Google and Facebook.
He said that Google’s recent promise to pay more tax was a result of “public opinion pressure, media pressure and political pressure”, and said that if it hadn’t been for those complaints “this declaration wouldn’t have been made – the fact they say they don’t pay enough tax proves pressure pays.”

Mr Moscovici also raised the spectre of a profound change in the way corporate tax is calculated, saying that he was investigating whether it would be possible to tax companies on their turnover, rather than their profit.
Many multinational digital companies record financial results that show huge turnovers, but slender profits.
“Our corporate tax system was innovated a century ago when there was no digital economy and no globalisation,” he told Sky News.
“We knew where a firm was located, where were the jobs. That’s not the case with the new economy. We need to adapt our tax system.
“It is still relevant to tax profits but we need first to identify what is the digital presence – where is the profit located. There are ways to tax revenue rather than profit. We will explore all avenues.”
Mr Moscovici said he considered taxation as a key tool for tackling inequality, something that he sees as a profound threat to the idea of global capitalism.
“Here in Davos, you have the richest people in the world,” he said.

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“One percent of people in the world concentrate 80% of the world’s wealth and here you have the top one percent of that one percent. But they are also citizens of the world
“Globalisation cannot go on when you have such inequality. Taxation is one way to tackle this problem.”

Source: SKY