Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

While we do not object in principle to the concept of an FTT, our opposition is for practical reasons, because we have a financial services industry in Dublin that employs many people in well-paid jobs. If we were to apply a tax which made Dublin less attractive than London, there could be a transfer of companies from Dublin to London. While I do not want to speak for Mr. Honohan, he may have appeared to have softened in his view because when the FTT concept was originally promoted, it appeared to be a very onerous tax on all financial transactions. However, it now looks like it would be akin to a stamp duty on shares and maybe other financial transactions. In our tax code we already have a 1% stamp duty on the sale of shares, while the UK charges a 0.5% tax on them.

The UK's worry is probably about the movement from the buying and selling of shares into other trading of financial instruments, particularly with the multiplicity of trades that can take place on computer systems in the space of a minute. If one is doing 1,000 transactions per minute and is being charged separately on every one of them, even if the rate is minimal, it will have an impact. It might be a good thing and stop much of the malpractice that comes from accelerated trading on the markets. The view emerging is that when it finally settles, it may not be as onerous a tax as when it was first conceived. My latest information is that it would be akin to our stamp duty on share transactions, but at a much lower level. This might be just a first step from which it might move on. We hold our position, namely, that we are not getting involved because of the possibility of the transfer of business and jobs from Dublin to London.