Financial Transaction Tax and Economic and Monetary Union

Stephen Williams Excerpts

Tuesday 18th June 2013 Commons Chamber

[Chris Leslie]

The public are sick and tired of hearing more of the same from the Government—no solutions, just reasons for not doing anything differently. It should not need to be restated—although it clearly does for Government Members—that the global financial crisis and the collapse of many organisations in the financial services sector required an enormous bail-out from the public purse. That collapse in revenues led to an extra £300 billion on the national debt. As the Government have failed to turn things around, we can see that many of the consequences are still being felt today by our constituents and that we need to do something different.

[Stephen Williams (Bristol West) (LD)]

I just want to clarify that my position and that of my party is that a financial transaction tax could make a useful contribution to world development if it were introduced across all the global financial sectors. Is it the Labour party’s position that if the EU proposal, which, as constituted, would affect Paris, Frankfurt and perhaps London, were to go ahead, Labour would support it despite it not also applying to New York, Zurich, Shanghai and everywhere else?

[Chris Leslie]

I shall set out our position clearly: we do not think that the EU variant of the FTT is optimal. Of course it should be improved. We think there are better ways to design these things and I shall come to many of the arguments in a moment. I am delighted that the Liberal Democrats—well, the one Liberal Democrat who is in the Chamber—support the principle of a financial transaction tax. That is exactly why we phrased the amendment in the way that we did.

Let me read the amendment out so that the hon. Member for Bristol West (Stephen Williams) can consider it carefully, because I am minded to test the House’s opinion on it. We are calling

“on the Government to support the principle of an FTT”—

so far, so good—

“to learn lessons from the EU proposal”,

which, of course, we have to do, and to

“work with other global financial centres, especially the US”,

as clearly New York is central,

“to reach a consensus on a design set at a modest rate without creating negative economic consequences and which minimises international tax arbitrage”.

I am quite sure that in his heart of hearts the hon. Gentleman does not disagree with a single word of that.

--- Later in debate ---

[Stephen Williams]

The shadow Minister is absolutely right: I did not disagree with a single word he read out. It was, however, a selective reading of the amendment, because he left out the first couple of lines, which would leave out the reference to the fact that the Government are challenging the European Parliament’s decision in the European Court of Justice precisely because it affects this country adversely while we do not have global agreement. That is the problem.

[Chris Leslie]

Oh dear, oh dear, oh dear! The hon. Gentleman cannot seriously be suggesting that he is going to vote against the amendment because we have to leave out the reference to further noting that there is a Court challenge. I would have been quite happy to have tabled an amendment that did not leave out that bit of terminology, but—I am sure that you can confirm this, Mr Deputy Speaker—we did not do so because the Clerks tell me that a motion can only have 250 words. Of course, the Government use up their 250 words in the motion, so we needed to find space to insert the reference to the principle of the financial transaction tax. The hon. Gentleman should trust me: I have been considering the point and I did not want to leave anything out of the motion, but we wanted to put that reference in. I hope that with that assurance, he will think again, because the amendment is eminently supportable.