Friar TUC joins the Robin Hood Tax campaign
Almost twice as many people would support a financial transaction tax as oppose the idea (53% against 28%), according to a YouGov poll carried out for Oxfam late last year.
The Robin Hood Tax could raise hundreds of billions of pounds to help repair the human damage caused by the global economic crisis, protect public services at home, fight poverty abroad and help foot the bill for climate change, through a levy on banks’ financial transactions. The rate would vary according to the type of transaction, but around an average of 0.05%.
The market for financial transactions has exploded in the last decade, and is now worth 60 times global GDP. Before the financial crisis banking was the most profitable industry in the world, with profits five times those of pharmaceuticals, and three times bigger than privatised utilities. At the same time the financial sector isn’t taxed as much as other sectors.
Given the huge number of such transactions taking place, it’s estimated that if applied internationally, the low rate scheme could raise £250bn a year. Put against the £4bn reckoned to be enough to halve child poverty in Britain, it’s clear the tax could do a vast amount every year.
The campaign coalition – 50 agencies ranging from Oxfam to the RSPB, and all points in between (including the TUC), are calling on party leaders to support a global tax on the banks, but also to do more in the UK and EU. While an internationally agreed tax system would be the best way to proceed, there’s also a lot the UK Government and European Union could do now to take a lead and build on transaction taxes already in existence, such as UK stamp duty on shares (at 0.5%).
They’ll find an electorate pretty sympathetic to the idea as a way of addressing the UK deficit. The Oxfam poll found that more than a third of people (36%) thought a tax on banks would be the best way to cut the deficit, compared to 26% who opted for cutting public spending, 9% for increasing businesses taxes, 7% for raising income tax, and 4% for increasing VAT.
It could well be the right idea at the right time. The UK campaign is part of an international movement with similar calls being made in the USA, Europe and across the developing world. Gordon Brown, Angela Merkel, Nicolas Sarkozy, Nancy Pelosi, Jose Manuel Barroso, Meles Zenawi (Ethiopia) have all spoken out in recent months in support of some form of transaction tax. It’s also been backed by financial figures such as Lord Turner, George Soros, Warren Buffet, Avinash Persaud, Sir Philip Hampton, and Terry Smith.
Last word goes to Ethical Currency Ltd founder Alastair Constance, who already contributes a voluntary levy on currency transactions via his company:
“Billions of pounds whizz round the global financial system every day. A tiny tax on each transaction is absolutely practical and will hardly be noticed by those paying it. But it could still raise billions to help make the world a better place.”