Financial Transaction Tax: European Union Report

Debate between Lord Davies of Oldham and Baroness Randerson

Wednesday 11th July 2012 Grand Committee

[Lord Davies of Oldham]

My Lords, I begin by thanking the noble Lord, Lord Harrison, for his chairmanship of the committee, which has produced such an incisive report, and for his opening speech today, which covered accurately the committee’s conclusions on the issue of the tax proposed in Europe. As has been said, some aspects of the presentation by the Commission on the tax have been clumsy in the extreme, giving the committee a fairly straightforward and easy target. But I side with those noble Lords who have spoken today who have indicated that we ought not to drown the concept of this form of taxation, usually termed the Tobin tax, because this particular proposal has relatively few merits.

The noble Baroness, Lady Randerson, mentioned the emotion in Britain about the financial and economic situation in which we find ourselves. She even indicated that it was more intense in Britain than elsewhere. Are we really saying that we are not aware of the emotional responses of the Greeks, the Spaniards and the Italians, just to cite three countries where enormous popular concern has been shown—in Italy leading to the imposition of a Government on a democratic country? Is it surprising that from Europe comes an attempt at a condign punishment on bankers and a challenge to the financial system that has produced these circumstances?

[Baroness Randerson]

The noble Lord is really taking my words out of context. My very first sentence of significance related to my understanding that there was an emotional attachment to this tax. At no point in my speech did I say that I was opposed to it on a worldwide basis. I explained very clearly that I understood that there was a public popularity for this tax.

[Lord Davies of Oldham]

I accept that entirely from the noble Baroness. I am grateful for her intervention—but let me respond, if I may. I am merely indicating that this is not just a British reaction but is Europe-wide, which is why we have to put these proposals into some kind of context. People are responding to the crisis that was visited on us four years ago, for which all our fellow citizens, both here and elsewhere in Europe, are paying the price today.