Lib Dems need to press Cameron to implement Robin Hood Tax

This was the week Robin Hood rode back into our lives – not on the back of a glistening stallion but in the form of Russell Crowe.

Our guest writer is Mike Childs, head of climate change at Friends of the Earth

This was the week Robin Hood rode back into our lives – not on the back of a glistening stallion but in the form of Russell Crowe, on the back of the latest reinvention of the story by director Ridley Scott; it’s a timeless tale,  the robbing of the rich to ‘redistribute’ – to use modern parlance – to the poor, which is perhaps why it’s endured for hundreds of years.

And yet it’s also a tale with massive contemporary resonance. The parallels between the disempowered, impoverished denizens of Sherwood Forest, paying for the profligacy of a caste of frivolous rulers bleeding them dry of every last penny, and the events of today, are obvious.

It makes it even more appropriate , then, that our favourite outlaw’s name should be attached to a tax which would make the bankers pay for the financial meltdown they’ve inflicted on us all – a Robin Hood Tax.

Going into the election, all the major parties pledged popularist support for a ‘tax on bankers’ – woolly, but a step in the right direction. Now that the ConDem coalition is starting to flex its muscles, it’s time for the rough outlines of this policy to become more clearly defined.

We’ve had big talk of cutting the deficit – the tough decisions that will have to be made and the belts that will have to be tightened – yet a small tax on financial transactions, which could raise hundreds of billions of pounds to plug the very gaps in poverty alleviation and tackling climate change threatened by a financial crisis of the bankers’ making, is conspicuously absent from David Cameron’s rhetoric.

The financial crisis was one factor that helped to contribute to the failure of the Copenhagen climate talks back in December last year – governments in Europe and America were unwilling to put the sums of public finance on the table which would have helped move forward the negotiations.

The potential returns of the Robin Hood Tax are huge; internationally over $400 billion and tens of billions in the UK alone. These are huge amounts in the context of the current financial crisis but not a penny less than the sums fairness demands for developing countries – countries which have done the least to cause climate change, but which need to grow cleanly and adapt to the impacts already putting millions of lives at risk.

The Lib Dems have already accepted that the Robin Hood Tax is feasible and that the money provided should be earmarked for developing countries. A unilateral tax in the UK – a tax on risky banking, called the Financial Stability Contribution – seems almost certain, and potentially even a Financial Activity Tax,  on excessive profits and remuneration, but neither will generate a fraction of the money the Robin Hood Tax could.

The fact that they now have two senior ministers – Vince Cable and David Laws – in finance portfolios increases the chances that a financial transactions tax will be discussed at the very highest levels in the Treasury, and more assertively than under Labour.

In the last six months we’ve already seen tremendous momentum build behind the campaign. Governments have shifted from asking the question of whether they should tax banks, to how they will tax banks. It is time for the new Government to go a step further and introduce a measure which would give credence to its stated commitment to fairness.

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