The Tories should introduce the Robin Hood Tax if they truly want to help the poor

The emergency budget is to be on June 22 and David Cameron has already begun to try and soften the ground. The pain, he states, will be felt by everyone. This is worrying and could be avoided by the introduction of the Robin Hood Tax, says the ippr.

One of the ways of raising much needed funds is through taxation. Liberal Democrats campaigned on a platform to raise employee contributions to national insurance. Conservatives, on the other hand, favour raising VAT to as high as 20%, which would be regressive.

Taxing corporations is another means of raising funds, however, it has several drawbacks, including passing the cost on to its consumers, cutting labour costs and leaving the UK. Nor would its reach be felt meaningfully beyond our shores. Many feel that the financial sector should be taxed to a greater extent given that they have caused the recession.

The most effective way to tax the financial sector is through a Robin Hood tax.

Such a tax would help ease the effects of the recession in the UK and across the globe, as half would be dedicated to international development.

Who would be most affected by this tax? Clearly, it would be those who make frequent trades, namely investment banks and hedge funds in the developed world. Such a tax could recognise that the effects of capital flows are felt (both positively and negatively) across the globe, and most keenly in the developing world. Pension funds and insurance companies, would also be affected but, they tend to trade less frequently and thus would pay a smaller proportion.

Bob Neil MP revealed in the House of Commons June 10th that the poorest will face the largest burden of paying down the debt. This is in direct contrast to Cameron’s promises to protect the poor. A tax on financial transactions would raise approximately £25 billion; more than twice the amount that could be raised from increasing VAT to 20%. It is not just the less well off at home who would suffer from the suspected Tory plans, but millions overseas who will be deprived of financial support that they so desperately need.

By Margaret Dantas Araujo

“Tights, Camera, Action!”

If you love making films, like a good competition, and… well… fancy yourself in a nice pair of tights! – this is for you.

We know that plenty of LCID members will relate to the Robin Hood Tax as the ‘Tobin’ international tax on banks, and this is a lighter way of connecting with a key issue for the present UK government.

The Robin Hood Tax campaign is calling on budding filmmakers to showcase their talents in a new short film competition, which will be judged by the award-winning actress Sienna Miller and world-famous writer & director Richard Curtis. Judges are looking for 60-90 second films, which reflect the aims of the campaign and inspire others to sign up.

Find out more!

Curtis, puts it best when he says: “We are looking for original and creative films that sell the idea of the Robin Hood Tax in new and exciting ways. We want anyone who watches the winning films to turn to the person next to them and say – ‘I’m sure as hell supporting that!’”

For those that don’t know, the Robin Hood Tax is a tiny tax on banks that would generate billions to tackle poverty and climate change, both here and abroad.

Prizes include a master-class with Richard Curtis, being featured on YouTube’s home page and camera equipment is also up for grabs. There will be a separate category for under 18’s, judged by Harry Potter star Tom Felton, Blake Harrison – star of E4 comedy, The Inbetweeners and Joe Dempsie who is best known for his role as Chris Miles in Skins.

Robin Hood, Robin Hood, riding through….Hyde Park!

Speaker’s Corner is a famed place for freedom of speech, where the good, the bad and the ugly have all enjoyed the freedom to speak openly about their passions, causes and beliefs.

On the very sunny Saturday just gone, LCID went down to hear Robin Hood and a Banker battle it out on soapboxes – cheered and jeered by a gang of merry men and women, in a flash-mob as part of a national day of action for the Robin Hood Tax campaign.

LCID backs the campaign and calls for all parties to support it. Supporters are calling for a tiny tax of 0.05% on banking transactions, with the resulting funds spent on aid for poverty both at home and abroad and climate change adaptation funding for developing countries.

In the first Gordon Brown on the Road event we attended last week, the Prime Minister spoke of the responsibility the financial sector has in overcoming the economic crisis. The Robin Hood Tax offers part of that solution and can help lift millions out of unnecessary poverty.

Show your support for the Robin Hood tax campaign by taking action on the website.

By Serena O’Sullivan

Cameron MEP’s extraordinary rant against Robin Hood tax

Left Foot Forward reported on Friday this extraordinary rant against the Robin Hood Tax:

One of David Cameron’s MEPs has launched an extraordinary attack on the Robin Hood Tax,hailed as a tax on bankers that would give billions to tackle poverty and climate change, in Britain and abroad, raising hundreds of billions each year.

Tory MEP for South East England Nirj Deva, however, claimed the tax would:

“Give money to a whole bunch of people who will probably steal it.”

Watch it:

The hostility of the Tories’ spokesman on international development and vice chair of the European parliament’s development committee to the plans will be bound to cause worries for the Tory leader, keen to rid the Conservatives of their “nasty party” image.

His European representatives in particular are doing their best to re-inforce that picture, however, having opposed the Labour-backed proposals to establish a tax on financial transactions; the Parliament, though, supported the European Socialists & Democrats’ call for an international levy on financial transactions “as a fair contribution from the financial sector to global social justice”.

Mr Deva had desctibed the report as “silly” and “irrelevant”, adding:

“If you sell all the properties which are extra legal, the slum valued properties which are not part of the legal system in the developing countries you will achieve $7 trillion – there is a whole bunch of capital waiting in the developing countries which are outside the legal structures of those countries from the slums to those millions of businesses on the side of the roads you see which are not part of the formal economy.

“Secondly, if you ask how much money’s coming out of the developing countries every year, through into the financial systems of the world, it’s $800 billion. Why are we not working to keep that capital in those countries making those countries richer. No, what did we go and do just now, we voted for a Tobin tax to hammer already weakener financial institutions in the west and give money to a whole bunch of people who will probably steal it.

LCID reacts to the 2010 Budget

The UK Chancellor of the Exchequer Alistair Darling today delivered the final budget before the election – and Britain has kept its promise to the worlds’ poorest.

The Department for International Development will have a budget of £7.8billion in the next financial year, up from £6.3billion in 2009-10. This £1.5 billion increase will provide vital additional funds to help reduce extreme poverty.

The budget reinforced Labour’s commitment to reach the target of spending 0.7% of GNI by 2013:

“spending on international development will continue to rise in the next Spending Review period to meet the Government’s Official Development Assistance (ODA) commitment in 2013 as planned.”

We need to ensure that Labour’s commitment is enshrined in UK law. The Conservative’s claim they’ll match 0.7% spending – but slashed the aid budget in half when they were last in power and have refused to back enshrine that in law. Sign up to the campaign at globalpovertypromise.com.

We do, however, share the disappointment of the Robin Hood Tax campaign that it was a missed opportunity to propose a Financial Transaction Tax to raise millions for tackling poverty at home and abroad.

Tories call Robin Hood tax “hopelessly naive” – despite its backing by world economists

Our latest post for Left Foot Forward.

It is just two days since the “Robin Hood” tax launched and already 23,000 people have voted in favour on the campaign’s online poll: 13,000 signed up by email and 21,500 joined the Facebook Fan page.

Gordon-Brown-FT-interviewThe Financial Times reported yesterday that Gordon Brown believes the IMF will endorse a global bank levy before its April meeting in Washington, and that an agreement in principle can then be agreed by world leaders at the G20 summit in June.

It follows his response to a question tabled at Wednesday’s PMQs, in which he stated his belief that:

“We will reach agreement on a global financial levy … I believe that we will be able to go ahead with it in the not too distant future.”

Despite being backed by more than 350 of the world’s leading economists and world leaders, the response from the right-wing blogosphere has been predictably lamentable.

Conservative Home led with a blog that described the tax as a “fairytale” that “won’t help anyone”, with centre-right ‘non-party political’ thinktank Reform calling it “hopelessly naive”.

Meanwhile, perhaps taking the Tea Party “revolution” as their inspiration, a “The Robin Hood Tax is a stupid idea!” Facebook page has been set up. It has 31 fans. It appears to be an aggregator of some of the Tory blogosphere’s reaction to the tax.
Here is a selection:

• “It’s lunatic on the very face of it”

• “They’re fucking mad, aren’t they?” – Adam Smith Institute blogger Tim Worstall

• “The last thing we want is to increase benefits or money to those out of work. If it is to be used to help prevent climate change, as I read elsewhere, do we really need another ‘Green Tax’ from this government?”

“The Robin Hood Tax is just there for socialists and other Trots to latch on to a figure of public hatred and propel their communist views”Cardiff Blogger, ranked 26th top Conservative blogger (by Total Politics)

• “This is an absurd concept that pulls figures out of its arse and expects everyone to just believe it” – Conservative candidate for Three Rivers district council Chris Hawes

• An “initiative by the economically illiterate designed to appeal to those who are economically illiterate” – Conservative blogger James Burdett

• “Even though I fear that wading in may make it look even more like the Tory Bloggers have received their marching orders on the Robin Hood Tax I’m going to add my two cents (or should that be 0.005%) to the general condemnation of it” – Stratford Conservative

There are a few common themes running through their arguments which are worth addressing.

Claim #1: It will harm the economy

Nobel Prize winning economist Joseph Stiglitz said this of short-term trading in an interview with the Evening Standard:

“Does anybody seriously believe that anything happens because of the sort of micro-second trading we’re now seeing? It’s a function of speed. No investments are being made as a result of it, no jobs are being created.

“Finance has a vital socially important role to fulfil, which is to raise capital, to run payment systems, to oil the wheels of everything society does. But the bankers fail to perform that socially useful function — and because of that, the world’s economy has suffered.”

Claim #2: It will harm ordinary consumers, including ‘holidaymakers when they exchange money at the airport’

The Robin Hood tax campaign FAQ states that:

“The Robin Hood Tax will not impact on personal banking or on retail banking. That’s because it targets a distinct area of bank operations – high-frequency large-volume trading, undertaken by financial institutions in the ‘casino economy’.

“If you change money to go on holiday, send remittances abroad, invest in a pension fund or take out a mortgage, you will not be affected by this tiny tax.”

Claim #3: It will never work because a global agreement will not be reached

Gordon Brown said in PMQs that it “must be done by countries working together” – and with Germany and France having previously backed the idea, and the PM speaking of an agreement at the next IMF and G20 meetings, a global bank levy is closer now than at any time since James Tobin proposed the idea.

Adam Lent, the TUC’s head of economic and social affairs, has argued that if enough momentum could be built up to bring the US and Japan on board, then:

“The biggest financial centres will be covered making it very difficult for financial companies to avoid the tax by shifting transactions or operations elsewhere.”

The campaign itself stresses unilateral action could be taken, proposing that:

“While an internationally agreed tax system is the best way to proceed, the UK Government and European Union should start extending transaction taxes already in existence, such as the UK’s 0.5 per cent stamp duty on shares.”

To conclude, no one in favour of the Robin Hood tax is arguing that it is the magic bullet in the war against poverty. The same organisations involved in pushing this campaign have long argued for reform of the international institutions governing globalisation, a fair global trade deal and a fair global deal to tackle climate change, and they will continue to do so.

There is no contradiction, however, in also trying to seize a once-in-a-generation chance to build an opportunity from crisis and push for £400 billion. This is and idea whose time has come.

by David Taylor

LCID backs the Robin Hood Tax

Today sees the launch of the Robin Hood Tax campaign by many of the key organisations responsible for the Make Poverty History campaign 5 years ago, including Oxfam, the TUC, ActionAid and Save the Children, backed by Comic Relief founder and film maker Richard Curtis.

LCID would like to urge all party members to get behind the campaign, and at our Launch event last week called on Labour to back a Financial Transaction Tax in our next manifesto.

Essentially, it’s a Tobin Tax, but this time with a more catchy name. Catchier still, they see the tax being split 50:50 between helping fight global poverty and climate change abroad – but also stopping cuts in crucial public services and reducing poverty in the UK.

This could ensure the campaign gets widespread support from a public angry with bankers. A YouGov poll in November found that almost twice as many people would support (53 per cent) than oppose (28 per cent) a financial transaction tax on the basis that some of the money raised would be used to help people hit by the economic crisis in the UK and abroad.

Just 0.05% from international bankers’ transactions could raise up to £250 billion a year, meaning we could:

  • Meet the Government’s target to halve child poverty (£4bn).
  • End the benefit trap that makes it too expensive for people to leave welfare and return to work (£2.7bn).
  • Protect schools and hospitals at home and abroad under threat of cuts.
  • Meet the Millennium Development Goals to cut child deaths by two-thirds, maternal mortality by two-thirds and tackle malaria and HIV/AIDS.
  • Provide resources to enable a deal to be done on tackling climate change.

The key question, however, is how much traction this transaction tax will gain, both in the UK and globally.

What will be the response from all three UK parties? We hope the Labour will strongly back this campaign, and look forward to the response from Douglas Alexander. At out Launch last week, Mr Alexander was broadly supportive but stressed the need for global backing.

Bank job

The coalition stress that unilateral action could be taken, arguing that “the UK Government and European Union should start extending transaction taxes already in existence, such as the UK’s 0.5 per cent stamp duty on shares.” However, as they readily acknowledge, a global agreement is desirable.

The Make Poverty History campaign in 2005 showed both the benefits and limitations of unilateral action. At the G8 debt was cancelled and UK aid substantially increased through a combination of leadership by the Labour Government and an active civil society ensuring support from the UK public. Meanwhile, the failure at the World Trade Organisation talks the same year was partly because there was not enough pressure from civil society in the US and across the EU outside of the UK. The organisations involved will be smart to that, already stressing that the Robin Hood Tax will be a global campaign.

Labour Campaign for International Development wish them the best of luck. This campaign – along with the Global Poverty Promise campaign to enshrine 0.7% in law – are vital in ensuring we continue the leadership shown by Labour in the last 13 years and meet the UK’s obligations in the fight against global poverty.

by David Taylor