Probably the most popular tax in the world
11 September 2015
Today is a watershed moment in our campaign: over a million actions have been taken calling for a Robin Hood Tax. This huge groundswell of support is the latest signal to politicians the world over that we demand banks pay their fair share to help those hit hardest by their crisis. With the explosion in high-frequency trading (and the recent volatility of the financial markets), the need to tax these financial transactions - the same sort that helped cause and exacerbate the crisis - has never been greater.
Support for the campaign has come from far and wide: from religious leaders to a thousand economists (including Nobel Prize laureates Joe Stiglitz and Paul Krugman) demanding that banks pay their fair share. Trade unions, NGOs (including Global Justice Now) and environmental groups are some of the members of our 120-strong (and growing) coalition - the Fire Brigades Union joined us only last month. Not to mention the hundreds of thousands of people who’ve stepped up to demand banks foot their bill.
Reaching this million milestone could not have been timelier: tomorrow, 11 of Europe’s finance ministers are meeting to fine-tune their Robin Hood Tax proposal. Across the continent, almost all major economies (including Germany and France) are lining up to introduce this common sense tax. But there is one notable exception: the UK (more on that in a bit).
With tens of billions of Euros on the line, the Million Strong actions are calling on these leaders to ensure that they seek an ambitious settlement that would help fund public services and the fight against poverty and climate change:
- In less than two months, the Robin Hood Tax could help 4 million of the most deprived and homeless children in Europe to break out of poverty;
- Just over a fifth could entirely reverse the cuts to education that southern European countries had to make in the fall-out of the crisis;
- 25% of it could help provide sustainable $10bn every year for the Green Climate Fund.
With inequality and climate challenges growing by the day, these funds could go a long way to mitigating and preventing the worst excesses of out-of-control business activities from devastating the lives of some of the world’s poorest people. In short, it could prove a real gamechanger.
But it’s not just about the good the money could do: it’s also about the impact that the Robin Hood Tax would have on an increasingly reckless banking sector. Every month, we’re treated to a litany of scandals emanating from the financial world. From mis-selling to rate-fixing, the banks have proven time and again that they are unable to keep their house in order.
Nowhere is this more obvious than in the world of high-frequency trading (the hyper-fast trades described by former chairman of the financial services watchdog Lord Adair Turner as “socially useless”). By taxing these fast-paced transactions, a Robin Hood Tax would throw ‘sand in the wheels’ of the markets - to quote Nobel Prize-winning economist James Tobin (who invented the idea) - and encourage much-needed longer-term investment.
And reform is sorely needed. After causing a crisis that needed trillions of public money in bail-outs, the sector is continuing with the same bad behaviour that got us in to this mess. Banks are in danger of becoming ever more isolated from the real economy, but are doing everything they can to avoid reform, especially when it comes to challenging the Robin Hood Tax. More than €120m is spent every year by the financial sector on lobbying in Europe - 30x the amount spent by all of civil society put together!
Fighting against these powerful interests has been difficult. Their interventions have slowed the negotiations. Scare stories have been fabricated to split the pioneering 11 European countries. There have been moments where it looked like the whole process would fall apart. But because of immense and sustained public pressure, we’ve been able to force the issue on to the table and keep it there. Any attempts to water down the proposal have been roundly decried by supporters across the world. But it’s not over: until we get banks to pay their fair share, we won’t stop.
And our demands are perfectly reasonable - everyone from the IMF to the IFS agrees that the financial sector is undertaxed; but they’re trying every trick in the book to avoid paying their fair share. British banks have been some of the most vocal in criticising the European Robin Hood Tax project, claiming it would cost them too dearly. Interestingly, this complaint is never raised when they’re regularly forking out billions in bonuses and tens of billions in fines.
Whilst Europe’s leaders are working out how strong they want their Robin Hood Tax to be, the UK government has spent tens of thousands of taxpayers’ money trying to scupper the initiative. Standing alongside the likes of tax-dodgy Luxembourg, the UK government has set itself in opposition to this proposal that could raise billions of pounds a year. Much of the rest of Europe has committed to ensuring their financial sectors pay for damage caused – we must do the same.
In his latest Budget, the Chancellor outlined how he was seeking £20bn worth of cuts in his November Comprehensive Spending Review. Ironically, this is exactly how much would be raised from a UK Robin Hood Tax every year. The government must choose whether it will continue to inflict pain on the poorest in society for a crisis they didn’t create, or do the right thing and bring a Robin Hood Tax home.
With our movement now Million Strong, we will keep up the good fight!