‘If the French want a Tobin tax they are free to have one’ – but PM will block any EU-wide move

Britain will veto any attempt to introduce an EU-wide financial transaction tax, Prime Minister David Cameron said.

He said France, Germany and other countries pushing for a levy were welcome to implement it within their own borders. But imposing a tax across the EU without similar measures in place elsewhere in the world would hit European jobs and prosperity, he said.

French finance minister François Baroin has suggested France could push ahead alone with a so-called “Tobin tax” amid UK hostility.

Mr Cameron said: “If the French themselves want to go ahead with a transactions tax in their own country, then they should be free to do so.

“We have stamp duty on share transactions in Britain and yet we have one of the most competitive and successful financial services markets.

“But the idea of a new European tax when you are not going to have that tax put in place in other places and so I will block it unless the rest of the world all agreed at the same time that we were all going to have some sort of tax.”

Former chancellor Alistair Darling, who ran the Treasury during the 2008 financial crisis, warned of an “unmitigated disaster” in Europe after European leaders had tied themselves into a “suicide pact”.

“If the eurozone crisis is not resolved, the chances are we will get recession in Europe,” he said. “If you get recession in Europe, the chances are we will follow, because it is such a big market.”

Mr Cameron tried to play down concerns that Britain would end up excluded from decisions affecting the single market under a new treaty being thrashed out in Brussels.

A bid to apply new rules across the EU was vetoed by the Prime Minister last month – but Britain found itself alone among the 27 member states in remaining outside.

“The interesting thing about this new treaty is it says very clearly in Article 2 that this treaty does not supersede or interfere with or override in any way the treaties of the European Union,” he said.

But shadow foreign secretary Douglas Alexander said: “Contrary to what David Cameron said, the draft EU agreement explicitly mentions the single market – leaving the Prime Minister’s guarantee looking increasingly threadbare.

“When jobs and growth in Britain depend on an effective resolution to the eurozone crisis, his decision to walk away from the table is looking more and more reckless.”