Lords reject EU transaction tax

Britain must veto European Union plans to tax financial transactions as they are flawed and would likely prompt banks to relocate, according to a house of Lords report due to be published today. The bloc's executive European Commission has proposed a tax on derivative, stock and bond trades to raise up to €57bn from 2014 to make banks pay for economic damage from the financial crisis. Much of the money would be collected in London, the EU’s biggest financial centre, but the report from the House of Lords said such a tax would not meet its stated objectives. “There is a significant likelihood that financial institutions will relocate outside the EU in order to avoid the tax,” the report said.