France’s Robin Hood Tax: has the sky fallen in yet?
No? Astounding – because today (1 August), France implemented its own Robin Hood Tax. It is a small start, covering only shares in larger companies, and at 0.2%, it’s still lower than the UK Stamp Duty on which it is modelled. But it was only ever intended as a step towards a wider, bigger European tax which the French, German and 10 or more other governments will be negotiating this autumn. And it is proof that such taxes can be introduced without the financial system crashing down around anyone’s ears (much more likely to result from the finance sector’s own incompetence, immorality or illegality!) and without a mass exodus of financiers from the Paris Bourse to London’s Stock Exchange.
This element of a broader Financial Transactions Tax was originally announced by former President Sarkozy at the beginning of the year, and was taken over (and doubled from Sarko’s 0.1% proposal) by President Hollande. It will only affect trading on French companies worth above €1 billion. But it will raise over €100 million a year for good causes like combating poverty at home and abroad (Hollande has specifically mentioned work on HIV/AIDS, although the details of where the revenue will go will not be decided until the Finance Bill is debated in the autumn) as well as tackling climate change.
Predictably enough, Sky News has said it will fall foul to the problems of the Swedish tax of the last century (it won’t because, guess what, French tax experts have learnt from the Swedish experience and designed it not to), and that the UK refuses to follow the French example. Which is good, because if George Osborne did copy France’s new tax, he’d be slashing a tax which already exists in the UK, has done for centuries, and raises over £3bn a year! The important question is why the UK wouldn’t even agree to rolling the UK’s Stamp Duty out across the EU, when the Germans offered that compromise earlier this year? Seems the UK Government gets the vapours every time anyone suggests extra taxes on the financiers who prop up the Conservative Party’s funds, regardless of whether the tax would fall on London or not!
But today is an important day, despite all of this, because – after two and a half years of campaigning which has seen many Governments agree that new financial transaction taxes would be a good idea – the French are the first to actually introduce one in response to our campaigning. “Allons-y!” as some people say….