Financial Transaction Tax Passed By Parliament

23 May 2012

The SNP MEPs, Alyn Smith and Ian Hudghton, have today voted against a legislative resolution in the European Parliament which seeks the creation of a financial transaction tax by some of the EU's Member States even if all cannot agree.

The resolution passed by 487 votes to 152 and will now proceed to the Council of Ministers where it is expected to be rejected.

Commenting, SNP MEP Alyn Smith said:

“The SNP supports the principle of a tax on financial transactions, and is working alongside organisations such as Oxfam to promote this concept on a global level.

"However, the specific piece of legislation which was laid before us today promises much, but does not do what it says on the tin.  It is fundamentally flawed, and not at the appropriate level of governance.

“We are opposed to the concept of EU taxation, because we believe taxes should remain very much a Member State competence.  A call to make explicit that the FTT revenues would be Member State resources was roundly rejected, which underlines this power grab.  Where this flawed proposal has been misrepresented as all sorts of silver bullets to the financial crisis, unofficially it was very much being earmarked as a source of revenue for the EU budget, a very distinct issue which must be treated separately.

“We also have strong doubts about whether the proposal could work at all. It may well, in fact, cause greater problems economically for the financial sector in Scotland.  A tax at European level could in all likelihood result in an "offshoring" of financial activities to other centres not affected.  It would not be difficult to foresee our industry relocate to the Isle of Man, Geneva or Moscow and that is a likely possibility.  This would leave the EU with less revenue and us with less of an industry, less revenues and less employment in a
sector of vital importance to our economy.

“The proposed tax is also is haphazard with some financial institutions and some financial transactions included but not others. To put it simply; it’s a nice idea in principle but flawed on several points and simply must not become a reality.”