Two reports out this week at international level indicate that the campaign for a Robin Hood Tax on financial transactions is beginning to pile up support. First, the Leading Group for Innovative Financing to Fund Development (a body of 55 national governments including the UK) has published a report saying that a currency transactions tax of 0.005% would raise $33 bn a year. Second, the European Economic and Social Committee (EESC), a tripartite body of employer, union and consumer/NGO representatives, has called for an EU level financial transactions tax of around 0.05% to control speculation and raise money for combating global poverty, tackling climate change and reducing deficits. So the pressure is mounting internationally for the Robin Hood Tax, and the next key pressure point will be the meeting of EU finance ministers on 7 September where France and Germany have insisted on a discussion.
There is no longer any room for doubt. A Robin Hood Tax could make a significant contribution to tackling the deficit, helping the poor at home and abroad, and tackling climate change. The expert report to the Leading Group – which includes ten leading EU member states and a majority of the G20 – lays down a challenge. Employers have agreed with unions through the EESC that we need such taxes to curb speculation and fund public goods. The EU, the G20 and the British Government should take the advice of the experts and the social partners: start with a tax on speculative currency transactions, and then build on that with a full-blooded Robin Hood Tax. The deficit which was created to deal with the global crisis can be controlled without swingeing cuts, by making the people who caused that crisis pay for it.
The Leading Group report is the most significant because it was commissioned by twelve major governments, including France, Germany and the UK, and gives expert support to the call for a modest Currency Transactions Levy (a key element of the FTT we want overall, and something the TUC called for in Chancellor Darling’s last budget). The report has been prepared for the Leading Group by independent experts including economists, accountants, financiers and advisers to banks like HSBC, but the Leading Group itself comprises the Governments of 55 countries (ten of them in the EU, and 11 of them – a majority – in the G20).
The full list is: Algeria, Bangladesh, Burkina Faso, Belgium, Benin, Burundi, Brazil, Cambodia, Cameroun, Cap Verde, Chile, Cyprus, Congo, Cote d’Ivoire, South Korea, Djibouti, Ethiopia, Finland, France, Gabon, Germany, Guatemala, Guinea, Guinea-Bissau, Haiti, India, Italy, Japan, Jordan, Lebanon, Liberia, Luxembourg, Madagascar, Mali, Morocco, Mauritius, Mauritania, Mexico, Mozambique, Namibia, Nicaragua, Niger, Nigeria, Norway, Poland, Central African Republic, United Kingdom, Saudi Arabia, Senegal, Sao Tome and Principe, Sierra Leone, South Africa, Spain, Togo, Uruguay.
The EESC report is not yet on the web (it’s awaiting translation into the 21 languages of the EU), but it represents the first major intervention involving employers (although Austrian employers have taken a leading role already). The report calls for an FTT set at 0.05% (which is the geometric mean of the 0.5% relevant to share transactions and the 0.005% applicable to currency transactions). It says the main purpose should be to curb short-term financial speculation, which is clearly a big issue for the EU since the Greek debt crisis began.
But it also commits the revenue generated to exactly the policy mix called for by the Robin Hood Tax campaign and others:
“This new source of revenue could be used to support economic development in developing countries, to finance climate policies in developing countries or to alleviate the burden on public finances. The last of these also implies that the financial sector will pay back public subsidies. In the long-term, revenues should provide a new general source for public income.”
The Robin Hood Tax is clearly an idea whose time is coming.