I have been contacted by a number of constituents via twitter and email about my views on the Robin Hood Tax concept; I also attended the Parliamentary briefing on the tax last week.
The Robin Hood Tax concept is also known as the “Tobin Tax” as it was proposed by economist James Tobin.
The basic concept of the “Tobin Tax” would mean that governments take 0.05% from international bankers’ transactions and this would create hundreds of billions of pounds a year to be spent on vital services and help fight global poverty and climate change both at home and abroad. Initial estimations have reported that by taking 0.05% of speculative banking transactions, around £263 billion would be raised globally every year, which would be split with half spent in the country where it was generated and the other half going to developing countries
The Robin Hood Tax campaign has develoved a great deal of momentum recently with over 120,000 fans on Facebook and almost 3,000 followers on Facebook. On the campaign’s website (www.robinhoodtax.org.uk) 61,000 people have voted in favour of the tax with 6,100 voting against. Along with this online support, over 80 domestic charities, faith organisations and unions including Oxfam, Unicef UK and Bernado’s have pledged their official support.
The concept of a financial transaction is a good idea in principle and it is something that the Liberal Democrats would be happy to persue. Although I am told it would be technically possible to levy such a small transaction tax on sterling transactions alone, it would be much better to have a common approach by leading financial centres including the US, German, French and Swiss governments. These proceeds could then be used for funding overseas developments.
The ‘Tobin Tax’ concept has been hampered by a number of issues ranging from techincal problems with its implementation and conflicting arguments about how best to use the revenue.
In the meantime the Liberal Democrats have proposed to create an immediate new levy on bank profits at the rate of 10% in recognition of the taxpayer support the banks have recieved. This proposed banking levy would be expected to yield around £2bn next year and could be used to tackle the UK structural deficit.