Support for transaction tax slow in mobilising

France and Germany are struggling to find nine countries to move ahead with a financial transaction tax while Ireland is among those continuing to decline to join in.

Finance Minister Michael Noonan distanced himself from the controversy surrounding the IFSC Clearing House Group. It is accused of over-influencing government policy on the tax, which could raise at least €500m a year.

Britain, in particular, was against the idea but Germany and France decided to push ahead in a move known as “enhanced co-operation”, for which a total of nine countries are needed.

Austria, Belgium, Portugal, Slovenia, and the Czech Republic have firmly signed up to it while Greece and Estonia say they probably will. Poland is considering its situation.

The Netherlands joined Ireland in staying firmly outside, saying it would not be acceptable unless it was adopted globally. Spain is undecided, while Italy says it will decide today.

Under the Freedom of Information Act, Irish MEP Nessa Childers in April discovered that the Government was heavily influenced in its decision to turn down this source of funding by the IFSC Clearing House Group.

This committee is composed of major figures from the world’s financial services sector and meets in the Taoiseach’s department about twice a month. It is chaired by Government secretary-general Martin Fraser.

One of its associated bodies, Aima, representing hedge funds, had produced a report for the department warning against joining the financial transaction tax. Its arguments have been borrowed by the Government and used extensively.

Ms Childers asked that the Clearing House meetings and those of their sub-groups be transparent and public. She said she has still to hear back from the Taoiseach’s department.

Mr Noonan said: “I don’t have an involvement. I’m not on it, my officials are. It is done out of the Taoiseach’s department. The financial services industry is a very important industry out of Ireland and we will develop it and we will ensure that it’s competitive with other financial centres around the world and we did that in the last Finance Bill where 21 separate measures were taken to tweak the IFSC package — any one of them on its own were not significant but the totality were well worth while.”

These changes included a €5,000 tax break for school fees for IFSC executives from abroad coming to work in Dublin.