Cameron backs a (limited) European Robin Hood Tax
Yes, you read that headline right. He said it, in the press conference after this week’s European Council ended. His precise words were:
“I have said very clearly to other European leaders that there are ways of taxing financial services to make sure they make a fair contribution. We have stamp duty on share dealings. Other countries could do that.” (Emphasis added.)
There’s always a limit to how much you can read responses to questioning at press conferences. But we’ve always argued that the UK stamp duty is a good example of an FTT that works, and that expanding the UK stamp duty to other countries would be a good first step. This was originally what the German Social Democrats called for in the last German federal elections, and it seems to be something that even Chancellor Merkel’s neoliberal coalition partners the FDP could sign up to. It is, roughly speaking, what President Sarkozy has suggested in France.
So this might be the beginnings of a consensus on a first step towards an EU-wide financial transactions tax which, while nowhere near as far as campaigners want to go, could give politicians the confidence to go further (it would raise only a few billion Euros – remember when billions sounded like a lot of money?)
For completeness, he also said some less complimentary things about the EU’s proposals for a financial transactions tax (see below). But the implication seems to be that if an FTT would not cost jobs, and if it could be designed so that people could not move their transactions to avoid the tax (ie if it was more like the UK’s stamp duty), he could support it. The Commission is shortly to publish a revised impact assessment which is likely to show that an FTT would not cost jobs (although we’ve always accepted it might move some around, eg from finance to public services and manufacturing), and is working with campaigners on how to design the tax so it can’t be avoided by moving jurisdictions.
“That is why I have been so clear about the financial transactions tax. If other countries want to put in place a financial transactions tax as originally envisaged by the European Commission, I know I used the word ‘mad’, but I do think it is an extraordinary thing to do. The European Commission has told us this would cost Europe half a million jobs. Now, when we are all fighting for jobs and for growth, to do something that would cost so many jobs does seem to me to be extraordinary. In the spirit of this healthy competition with France, if France goes for a financial transactions tax, then the door will be open. We will be able to welcome many more French banks, businesses and others to the UK and we will expand our economy in that way as well as by rebalancing it, because I think this is the wrong move.” ….
“The financial transactions tax, unless it is put everywhere in the world at the same time, simply drives those transactions to the jurisdiction that does not have it. That has been proven to be the case and that is why we think it is such a mistake.”