LORDS

Financial Transaction Tax: update

The EU Economic and Financial Affairs Sub-Committee has engaged in a number of rounds of correspondence with the Financial Secretary to the Treasury, on the proposal by 11 Member States to introduce a Financial Transaction Tax. This follow the publication of the Committee’s original report, Towards a Financial Transaction Tax? on 30 March 2012. The Committee continues to engage in correspondence with the HM Treasury as negotiations progress.

The Committee are highly critical both of the Commission’s “paucity of thinking” on the implications of the proposal for non-participating Member States, as well as the complacency shown both by the Government and the City of London about the impact on the UK of such a tax.

The Committee conclude that, despite Commission denials, UK authorities may be required to collect the FTT, and that revenue collected from London-based financial institutions could be used to reduce the EU budget contributions of contributing Member States. The proposal may fall foul of the legal requirement to respect the competences, rights and obligations of non-participating Member States.

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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 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 scrutiny

The Members of the Sub-Committee have declared the following interests in relation to their scrutiny work:

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: