Tamreez Inam from the Act Global project talks about the Robin Hood Tax Campaign and the UK General Election

It is hardly possible that you haven’t yet been exposed to the ‘merry’ and ‘mischievous’ tactics of the “world’s greatest bank job” aka the Robin Hood Tax campaign. The UK’s campaign has been leading the way and has now been joined by international campaigns from Australia to the United States.

The campaign has achieved some significant results. The EU parliament endorsed the tax with a sweeping vote of 536 to 80. Support comes from politicians such as Gordon Brown, Angela Merkel and Nicolas Sarkozy to economists including Nobel Laureate Joseph Stiglitz and Jeffrey Sachs, Special Advisor to UN Secretary General Ban-Ki Moon. These famous endorsements are in addition to hundreds of thousands of campaigners and ordinary people who believe in the simple philosophy of ‘taking from the rich and giving to the poor’.

To be more precise, the provocatively named ‘Robin Hood Tax’ would be a tax on speculative financial transactions carried out by banks, hedge funds and finance institutions to raise millions of pounds each year to be spent domestically on frontline services such as the NHS and internationally to combat climate change and help the world’s poor.

To put the whole thing in perspective, let’s answer a few questions.

Is the idea new? No. While it has been packaged now, let’s admit, with a fun name, the idea has existed for decades. Economists, such as the Nobel Laureate James Tobin famous for his proposed Tobin Tax, have been advocating a tax on financial transactions from the early 1970s. With every financial crisis, there was renewed interest in the tax and then it fizzled out.

So what’s different now? For one, the current financial crisis has been the most far-reaching crisis in recent memory and has affected billions of people all over the world. But most importantly while the brunt of previous crises, such as the Asian Financial Crisis, was borne primarily by those in the developing world, the current crisis has directly affected people in the developed countries. These potential voters of the most powerful countries in the world bring additional momentum to the campaign.

Second, the clever Robin Hood campaign has captured the imagination of millions of ordinary people by making the issue accessible and simple to understand. Previously such complex taxes were only debated in academic circles and excluded the average voter who did not feel competent to discuss the issue in an intelligent manner.

Does it sound easier said than done? Yes. A simple tax of 0.05% on transactions sounds simplistic and much more work needs to be done before the exact dynamics of it can be figured out, especially for complex ‘over the counter’ trading. Having said that, it is possible. For example, there is already 0.5% Stamp Duty paid on shares on the London Stock Exchange. Where there is a will, there is a way. And in this case, we need political will.

How will the money be spent? The campaign suggests that the nearly $400 billion (yes, that’s billion) raised would be split equally between domestic and international issues. Of the domestic spending, it is suggested that it may be spent on tackling child poverty, reforming the welfare system, investing in affordable housing and making homes more energy-efficient.

Internationally it is suggested that $100 billion would go towards international development while another $100 billion would be spent on climate change initiatives. The funds would be allocated by a UN mechanism “to ensure they are allocated fairly and according to each country’s particular needs”. However, it must be ensured that the usual bureaucratic UN procedures are not applied to this fund, otherwise a lot of money would get lost in red tape.

So what should we do? As the UK general election approaches, as voters we need to bring the issue to the forefront of the campaign agenda and ensure that it is brought to the notice of candidates. Although every party agrees in principle, there are still many, particularly from the Tory camp, who will wait for ‘international’ consensus before they endorse the tax domestically.

While international agreement is highly desirable, and even necessary for some aspects of the financial tax to be enforced, there is still lots that can be done with domestic regulation. International agreement should not be made a prerequisite for taking action domestically. The UK as a global financial hub should lead the world in taking the right steps to ensure that ‘small change for banks makes a big difference to the world’.

To read more about the Robin Hood Tax Campaign go to http://robinhoodtax.org.uk/. 

Tamreez Inam is a volunteer with MADE in Europe and works for Oxfam as a Volunteer Recruitment Manager.