LORDS

Financial Transaction Tax: follow up

On 10 December 2013, the EU Sub-Committee on Economic and Financial Affairs published its new report Financial Transaction Tax: Alive and deadly. 

Inquiry status: Inquiry concluded, Report and Government and Commission Responses published. Report debated 17 December 2013. Correspondence continues with the Government and the Commission.

This is an update report following the Committee’s March 2012 report Finanacial Transaction Tax analysing significant recent events including the decision by 11 EU Member States to go it alone and take forward an FTT, a leaked European Council Legal Service opinion that strongly criticised the legality of the proposal, and the UK Government’s decision to launch a legal challenge against the proposal in light of the potential detrimental impact on non-participants, including the UK.

The Committee agrees with the Council Legal Service that the proposal would breach EU law. It also accuses the European Commission of making an artificial distinction between the FTT’s imposition and collection in order to play down the impact on non-participating Member States, including the UK.

The report criticises the Commission for an “unjustified and misconceived” approach to enhanced cooperation (the process by which 11 Member States are taking forward an FTT), in particular because the Council was asked to allow its use before the significantly redrafted proposals were published. This approach undermines the Commission’s obligations to defend the interests of participating and non-participating Member States alike.

Although the Committee welcomes the steps taken by the UK Government to launch a legal challenge against the proposal, it nevertheless criticises the Government for their diffident approach and slowness to recognise the threat to the UK and wider EU interests that an FTT pursued by the 11 would represent.

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    Glossary

    • Reports and associated evidence - reports and evidence featuring written submissions and corrected oral evidence published at the conclusion of Committee inquiries. Evidence is periodically updated over the course of an inquiry and is not finalised until the relevant Report is published.
    • Uncorrected oral evidence - transcripts of oral evidence not yet approved by the Committee or witnesses.
    • Other oral evidence - corrected transcripts of oral evidence, usually taken for scrutiny purposes or for ad hoc/regular evidence sessions with Ministers.
    • Evidence - written submissions and corrected oral evidence published for scrutiny purposes or for ad hoc/regular evidence sessions with Ministers.
    • Responses to Reports - Government Department and European Commission responses to reports.
    • Call for Evidence - request to submit evidence to a Committee inquiry.
    • Correspondence - correspondence received and sent by the Committee excluding ministerial correspondence.
    • Correspondence with Ministers - Ministerial correspondence received and sent by the Committee.
    • Progress of Scrutiny - records the decisions taken by the EU Committee on European documents that have been deposited in Parliament for scrutiny.

Previous inquiry

Financial Transaction Tax previous inquiry

EU Sub-Committee A conducted an inquiry on the Financial Transaction Tax (FTT). The Committee published a report on 30 March 2012.

The Government gave their response on 24 May 2012. The report was debated on 11 July 2013.

Members interests

Members' interests in relation to the report Financial Transaction Tax: Alive and deadly

The Members of the Sub-Committee have declared the following interests in relation to the report Financial Transaction Tax: Alive and deadly:

Members are required to register any financial and non-financial interests that a reasonable member of the public might think would influence their actions in Parliament. The full text of the Register is available online: