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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16 Responses to “Lib Dems need to press Cameron to implement Robin Hood Tax”
Guido Fawkes
(A) Robin Hood was a tax cutter, not a taxer.
(B) It won’t work. See the history of the Interest Equalization Tax implemented by U.S. President John F. Kennedy in July 1963. It is the original reason why more dollars are traded out of London than New York.
(C) The huge figures confuse turnover with profit. It is an argument to increase taxes on profits (I would oppose that too) but to try to tax turnover demonstrates a complete lack of understanding.
(D) Increased transaction costs will just see the tax passed on to customers and eventually to consumers. We are taxed enough already.
Thomas Byrne
The IMF had this to say about the RHT:
“is not focused on core sources of financial instability. An FTT would not target any of the key attributes—institution size, interconnectedness, and substitutability— that give rise to systemic risk.
Its real burden may fall largely on final consumers rather than, as often seems to be supposed, earnings in the financial sector. No doubt some would be borne by owners and managers of financial institutions. But a large part of the burden may well be passed on to the users of financial services (both businesses and individuals) in the form of reduced returns to saving, higher costs of borrowing15 and/or increases in final commodity prices. … It is far from obvious that the incidence would fall mainly on either the better-off or financial sector rents”
http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/2010_04_20_imf_g20_interim_report.pdf
We’re looking at other option like a FAT tax – on the total rent-surplus extracted by the shareholders and employees, and so we should be – not measures like the RHT which would make the tax system -more- unfair.
Bham Labour Students
Omg nearly at 600 tweets! Also, any news on that Robin Hood tax? http://bit.ly/bbUAC1 #RobHunter was deffo a fan 😉
Simon Tinsley
How appropriate that finally a tax has been associated with a thief, as tax is essentially theft. Indeed you say that there should be a tax on bankers to make them pay for this crisis. Well, I would first say that although popular to ‘bash the bankers’ it’s not entirely true. After all, the crisis stemmed from the USA, right? And it stemmed from banks lending to people who couldn’t pay it back, essentially. If there is no increase in the default rate, structured finance causes no problems, when there is an increase is can amplify the risks involved.
So why were the banks lending to people who couldn’t pay it back? Well, because the US government told them too with the 1996 Community Reinvestment Act, which argued that they were discriminating against the poor and should lower lending standards or face penalties. Zoom forward 12 years and they are accusing the banks of doing just that, lowering their lending standards. Can you blame the bankers for being stuck between a rock and a hard place?
Not to mention that this tax aims to raise $400bn, while the total profits of the banking sector in the last boom year were $800bn. Some dynamic modelling might be in order here, don’t you think that a lot of the financial transactions – those high volume low margin trades – might *stop*, causing a huge decrease in revenues. Not only that, but it decreases money flows to business which do need it. After all, we’re in a period where low lending is a problem, so let’s try to dry up credit some MORE? It’s barmy, absolute madness.
Ignoring that, imposing it unilaterally in the UK is a huge threat to our competitiveness. The costs that they do bear on financial transactions that are still profitable will be paid by consumers. It’s such a bad idea I can’t even get across how important it is that this never ever sees the light of day. It’s like dropping an economic nuclear bomb.
PatrickKelley
Here’s a thought. Stop supporting the useless dregs of society on the backs of its productive members and stop allowing the immigration into your country of seventh century savages who have neither respect nor tolerance for your culture or way of life, and you could probably cut your taxes in half. Get the British governments hands out of the peoples pockets while they are following your every move and breath. Get them out of every aspect of your daily lives and guess what? They have less reason to tax you. You are being taxed in large measure to pay for your own social incarceration. I don’t see what’s so hard to understand about that.
What I do find hard to understand is how the “Conservative” Party qualifies for that name. In America, the vast majority of “Conservatives” would be obliged to run as members of the Democratic Party. Most of them would probably be liberal Democrats at that.
Not even the BNP qualifies as conservative. They have too many fascist tendencies. By and large, however, I think its only fair to point out that practically every party in Britain has fascist tendencies to one degree or another. The BNP is just more open and honest about it.
You people had better get your shit together before you faw down and go BOOM!