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There’s been some huge news on the Financial Transaction Tax of late, and we wanted to bring you all up to speed on the progress that has been made in Europe, the UK, the USA and beyond. There is more to do– but things have certainly come a long way.
Firstly, on 22 January 11 European nations including Germany, France, Italy and Spain got the go-ahead to implement an FTT covering shares, bonds and derivatives. 23 of 27 EU member states voted to allow this. This means skeptical EU nations like the UK can no longer block these countries moving ahead. Pierre Moscovici, the French Finance Minister, has indicated that the FTT should be implemented before the end of 2014, and that individual nations are likely to go ahead with unilateral taxes before then. This is a huge step – a tax estimated to raise€37bn a year is in sight. The FTT is officially the direction of travel.
Importantly, we have also seen positive noises from leading European figures on allocating a percentage of this tax to development and climate change. EC Tax Commissioner Semetacalled the FTT ‘an attractive funding solution for our global challenges such as development and climate change…We continue to [push for this].’ French development minister Pascal Canfin has announced he would favour a 20% or more allocation from the European FTT, going beyond the 10% already proposed for the unilateral French FTT therefore. These figures add to positive comments on the issue from Philippe Douste-Blazy, Angela Merkel and Jose Manuel Barroso in recent years – a significant consensus. We must build on such sentiments to help deliver a genuine Robin Hood Tax – where revenue is used to create jobs, keep schools and hospitals open, and help tackle poverty and climate change abroad.
Then on 14 February the European Commission produced the formal proposal which will shape discussions amongst the 11 nations on the FTT. These indicate the FTT will be broad based, include pension funds, be very difficult to avoid and have a negligible effect on long run growth. These are significant wins, but we must continue to ensure FTT coverage is as all-encompassing as possible.
In December the Robin Hood Tax campaign held a meeting with European civil society partners in Brussels. With 26 attending from 8 countries, it was a positive gathering which helped co-ordinate on-going efforts such as addressing concerns vis-à-vis pension funds, gathering material on malpractice in the financial sector, and examining the potential for various transnational sign-on initiatives. To ensure the European FTT is as well designed as possible with revenue allocated to tackling poverty and climate change at home and abroad, and, once it is delivered, to encourage others to join, it is vital such international co-ordination efforts continue. Developments from the December meeting will inform both our thinking and practice going forward.
The UK government is increasingly coming under fire for its anti-FTT stance. The Chancellor’s decision to scrap its stamp duty on AIM listed shares and abolish the schedule 19 fee will see the UK forfeit about 10% of revenues for its FTT – and this at the very time other European nations are showing that the direction of travel is very much with broad based, not narrower, FTTs. Encouragingly not all politicians agree with the Treasury however. Leading Labour figures Chris Leslie and Peter Hain have written articles calling for the FTT, whilst former City Minister (and pension fund chief executive) Lord Myners has said the FTT would be of benefit to pension funds. Lib Dem Business Secretary Vince Cable has said ‘there is a case’for the FTT, whilst Green Party MP Caroline Lucas has written to George Osborne calling for a more positive stanceon the European tax from the Chancellor. The think tank IPPR have published a report showing the FTT would raise £20bn a year in the UK, and called on the government to introduce the policy as it would be both more lucrative for the exchequer, and quicker to implement, than any mansion or land value taxes.The FTT is high on the minds of leading UK politicians, and with good reason.
Local councils are also showing that support for the FTT lies beyond Westminster.Torfaen, Lewisham and Islington have become the first local authorities in the UK to pass motions calling on the government to introduce an FTT. Cllr Tom Beattie, leader of Corby Council, has written a Guardian op-edsaying ‘councils and communities must make our voices heard on this issue and support a Robin Hood Tax that would ensure banks pay to protect local services.’ Cllr Bob Wellington, leader of Torfaen, took to Left Foot Forwardto write that he will be ‘encouraging all councils to follow Torfaen’s lead in passing this motion, and to put pressure on our politicians in Westminster to implement this much needed tax.’ More to come – watch this space.
Bonus season is still a huge opportunity for the campaign and our coverage matches that seen in previous years – the Robin Hood Tax campaign remains a key voice, getting into both printed media and onto television (RHT spokesperson Simon Chouffot appeared on ITV’s Daybreak.). Revelations that RBS and Barclays have paid 523 staff more than £1m a year, Lloyds awarding their chief executive £3.4m in bonusesdespite losing £570m last year, andstories regarding the bonus payments of Stuart Gulliver at HSBCtypify the prominent, sustained coverage the campaign has received in the mainstream media. In the month prior to 27 March, the campaign has had quotes in the Sun, Guardian, Independent, BBC News online, Evening Standard, and Daily Mirror to name but a few examples.
Given the regular – almost weekly – budget crises in the USA, it’s not surprising that the Robin Hood Tax is getting even more of an airing than ever over the pond, with regular media coverage in the New York Times, Washington Post, and Huffington Post. Our sister organization in the US, which launched last year and has done some massive campaigning actions, is now breaking through into the Washington DC mainstream. And with President Obama now in his second term, with a new Treasury Secretary (the last one was dead set against a financial transactions tax), there is real scope for progress.
Last month, in an initiative which Robin Hood Tax campaigners on both sides of the Atlantic started preparing for as soon as Obama was re-elected, EU Tax Commissioner AlgirdasSemeta travelled to New York and Washington to tell people about the progress being made in the EU, and encourage the US to follow suit. In New York, he met UN Secretary General Ban-Ki Moon, who welcomed what he was doing and supported the EU tax, as well as Wall Street leaders who, while clearly not cheer-leading, indicated that they were more interested in the detail of the tax than in opposing the principle (so remember that next time a big banker goes off on one – it’s a negotiating position!)
In Washington, Commissioner Semeta spoke at a public seminar we set up with the influential Democrat think-tank the Center for American Progress, which was established by President Clinton’s former chief of staff John Podesta (now a member of the UN High Level Panel on what comes after the MDGs post-2015). And we made sure Chris Leslie MP, Labour’s Shadow Financial Secretary to the Treasury, was on the panel too. Like Semeta, he then went on to see prominent Congressional advocates of a US financial transactions tax, and Semeta also saw administration officials.
That very week, Senator Harkin and Rep deFazio re-introduced their “Wall Street Trading Tax”. Their letter to other members of Congress seeking support for the tax quotes Nobel prize winning economist Paul Krugman and AFLCIO (the USA’s TUC) President Richard Trumka, but also former Chair of the Federal Deposit Insurance Corporation Sheila Bair and John Bogle, the founder of Vanguard, a huge mutual fund company.
Chris Leslie’s presence was designed to open up a dialogue between the Labour Party and Democrats about how to co-ordinate their work on the issue, to deal with concerns about tax competition between Wall Street and the City of London, although such competition is more apparent than real, given the possibility of designing FTTs to prevent avoidance by moving jurisdiction. There will be more transatlantic discussion as a result of his visit.
Chris Leslie recorded this interview after the seminar at which he spoke, and said:
“I don’t see any evidence that there would be a negative effect on economic growth. In fact, quite the opposite. I think if you did have a global financial transactions tax where all of the global financial centers were involved and it was also set at a rate that is pretty modest, it wasn’t going to have a distorting negative consequence, then you could raise revenues that would actually help promote growth and invest in job creation. And I think ultimately that’s one of the main arguments in favour of a financial transactions tax.”
Campaigners in the US were really pleased about the visits, and will be building on the progress made with the administration and with Congress, where even moderate Republicans are beginning to wonder where the money to keep the government going can be found…
Elsewhere, recent progress means that 6 of the G8 and 15 of the G20 will have implemented various forms of FTTs by 2015. South Korea is currently looking at taxing both currency and derivatives, Brazil and Taiwan continue to show the effectiveness of broad based FTTs in growing economies, and countries in the global south such as Mozambique are becoming the latest membersof the FTT club. In the run up to the Millennium Development Goal summit in September such momentum is vital. The FTT is a global movement with international backing that would benefit the poorest people in societies both north and south.
And finally, the 3rd International FTT Campaign Strategy meeting was held on March 26 in Tunis, where civil society gathered for the World Social Forum. 43 international campaigners (including from Brazil, Tunisia, Kenya, the US, Canada and beyond) attended the meeting. The aim of the meeting was to expand our campaign network to new organisational partners and territories and to agreecoordinated FTT campaign activities and actions over the coming months.
Robin Hood Tax - What is it?
In a nutshell, the big idea behind the Robin Hood Tax is to generate billions of pounds – hopefully even hundreds of billions of pounds. That money will fight poverty in the UK and overseas. It will tackle climate change. And it will come from fairer taxation of the financial sector.
This tiny tax on the financial sector can generate £20 billion annually in the UK alone. That's enough to protect schools and hospitals. Enough to stop massive cuts across the public sector. Enough to build new lives around the world – and to deal with the new climate challenges our world is facing.
The Robin Hood Tax campaign is a coalition of 120 domestic, international, faith-led and environmental organisations with a quarter of a million supporters in the UK, and the endorsement of many economists and celebrities. In the course of a year, the Robin Hood Tax campaign has grown into an international movement with campaigns in 25 countries over five continents: South America, North America, Oceania, Europe and Africa.
The UK government must resist fierce City lobbying and vested interests of a swollen financial sector that caused the largest recession in a generation. The UK government can avoid cutting public services. It can live up to its commitments on meeting the Millennium Development Goals and funding the fight against climate change. It can do this, not by taxing ordinary people through rises such as VAT, but by taxing the very sector that caused the financial and economic crisis. Greater taxation of the financial sector in the UK could raise an additional £20 billion a year. If introduced globally an FTT could raise upwards of £250 billion a year. Raised at this volume and spent in this way it would truly be worthy of the name of: Robin Hood.
The time for this great idea has come with momentum growing for an FTT across the world. As a priority of their G20 presidency, the French government have called for a coalition of willing nations to implement a Financial Transaction Tax. The German government also support a Robin Hood Tax, as do the Spanish and a number of other European nations and are pressing ahead to implement it at the Eurozone level. The opportunity is now.
So it's time for justice. It's time for justice for ordinary families and businesses. For the one in five British families faced with a choice between buying food or paying the heating bill. For the millions of people around the world forced into poverty by a financial crisis they did absolutely nothing to bring about.
The Robin Hood Tax is justice. The banks can afford it. The systems are in place to collect it. It won't affect ordinary members of the public, their bank accounts or their savings. It's fair, it's timely, and it's possible.
Not complicated. Just brilliant.
- Cast your vote for the Robin Hood Tax (new window)
- Contact your MP about the Robin Hood Tax
- Letter sent to David Cameron on the Robin Hood Tax
The short videos below have been produced by the Robin Hood Tax Campaign to promote the idea of the tax. Please circulate this link to all your colleagues and friends!
"The Banker" starring Bill Nighy