In a report that calls for the Government to implement the Kay recommendations, British MPs have called for the Government to consider imposing an FTT to help reduce high frequency trading.

Professor Kay, whose report into short-termism in equity markets was published last year, did not contain any mention of the FTT. But Adrian Bailey, chairman of the Committee, said he had found support for the tax during evidence sessions. “The Government should assess the likely impact of the introduction of a Financial Transaction Tax and how the obstacles to its implementation can be overcome,” he said.

Simon Walker, director general of the Institute of Directors, said he shared the MPs “desire to get moving with the recommendations of the Kay review.” But he added: “The Committee is wrong to call on the Government to look at implementing an FTT, which was not recommended by the Kay Review.” He added: “A tax on financial transactions will catch not only bankers but also businesses, pension funds and bank customers up and down the country.”

Brussels’ efforts to impose an FTT across the EU have been met with stiff opposition in London. The Chancellor has vowed to block any attempt to impose the controversial tax which has been blamed for driving business out of countries where it has been tried, including France.

Less controversially, the MPs urged the Government to “pick up a regulatory stick” to ensure that Professor Kay’s 17 recommendations are implemented.