Blog post: The Robin Hood tax - a chance to use the banks for something good

So far the US and Europe has managed to find $3 trillion to bail out the banks, more than $1 trillion of which has gone to the UK banking sector. The financial crisis, caused by the banks themselves, has cased significant increases in poverty and inequality in both the developed and developing world.

This is why WDM is part of a coalition pushing for a financial transaction – ‘Robin Hood’ – tax  to de-incentivise risky trading practices and reduce volatility in markets. This is an excellent opportunity to turn the crisis of the bankers into something good for the world.

A Robin Hood tax could raise an estimated $600-700 billion a year which could be used for pay for socially useful projects in the UK and abroad. The tax should be levied on all bank trades, ranging from shares to foreign exchange and derivatives. The cash generated could be spend on a range of projects, including combating poverty at home and abroad as well as fighting climate change.

The tax would also prevent speculative bubbles arising, such as the one that caused the global food crisis in 2008 and led millions more people into hunger.
Whilst we campaign for an international tax, Europe and the UK do not have to wait for the rest of the world to act. The UK already has a stamp duty of 0.5% on share transactions, and it is perfectly possible for the government to introduce its own currency transactions tax on sterling alone. Resorting to a ‘we can only do this with international support’ type argument would simply not hold up.

To make it even more effective, the tax could be implemented in such a way that it discourages speculation without affecting long-term investment. Joseph Stiglitz, for example, has said:

A tax structure that does not reward short-term, very speculative gains would be good. If you were investing for a year or five years or 10 years it would be a small tax but if you were holding it for just one minute it becomes a very high tax.

The campaign is supported by almost 50 organisations including WDM, Oxfam, the TUC, Barnardo’s, the Salvation Army, ActionAid and Save the Children.

In relation to this, we are also running a competition, calling for our supporters to dump Darling for Valentine’s, because of his soft-spot for the bankers.
We want Darling to renounce his love for the banks and stay true to the British people by whipping up international support for a Robin Hood tax in the run up to this summer’s crucial G20 Summit.

To enter the competition, simply leave a comment on WDM’s Facebook wall with your best ‘dumping message’. The wittiest and most politically astute comment will win an amazing hamper from Divine Chocolates.

It’s time that the banks paid their dues to the rest of society and the world.