Co-President Glenys Kinnock Letter in Guardian on case for Robin Hood Tax

LCID’s Honorary Co-President Glenys Kinnock has written to the Guardian on why the case of a Robin Hood Tax is now.

Bill Nighy is right to say it’s likely the Robin Hood tax is about to become a reality (A hero role for bankers?, 29 September). The announcement that the European commission will shortly produce draft legislation on how to achieve an EU financial transaction tax is big boost. Strong momentum has been growing behind the idea that there is an urgent need to raise funds for domestic and international priorities, including climate change.

The commission and others, including Bill Gates and George Soros, believe a modest but broadly applied tax across the G20 economies could raise £31bn and that even if all EU member states don’t agree then a coalition of the willing can take it forward. The UK and many other countries levy stamp duty (or similar) on share trades. That contradicts the view that FTT has to wait for global agreement since it has not led to a loss of competitiveness, or a mass exodus from the City. The latter would be highly unlikely since, as the Bank of England recognises, banks benefit from an implicit subsidy of £100bn every year. They would hardly flee abroad because of a small tax on share trades.

A good angle for the UK would be to look at wholly or partly replacing share purchase stamp duty with FTT and extending it to other asset classes like derivatives which carry no tax obligation. FTT has been described by the IMF as “highly progressive” and workable.

At the G20 meeting in November we can expect a coalescing of opinion around the need for innovative sources of finance, including the Robin Hood tax. A very modest levy would raise tens of billions to support and set in train finance mechanisms which could, say, kickstart the deadlocked global climate negotiations.

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