NGOs Call on British PM to Support Robin Hood Tax

Political momentum for an EU-wide financial transactions tax is gaining pace. As European leaders meet this week to discuss economic policy, members of the Robin Hood Tax campaign have called on British PM David Cameron to give the initiative his full support.

23rd June 2011 - Published by Share The World's Resources

As David Cameron heads to Brussels this week for the European Council meeting, Share The World's Resources has joined civil society organisations in the UK in calling on the British PM to support an EU level agreement on a Financial Transaction Tax (FTT). The letter, signed by members of the Robin Hood Tax campaign, notes the massive public backing for the tax, as well as growing support among leading European governments. The summit is a golden opportunity for Europe's leaders to forward a uniquely popular policy that will ensure the banks repay their debt to society, and will raise much needed finance for tackling poverty and climate change.

Whether or not a broad-based FTT will have an impact on speculative behaviour remains up for debate. In a recent review of empirical evidence, the Institute for Development Studies found that higher financial transaction costs would not necessarily stabilise financial markets. But many economists maintain that even a marginal increase in transaction costs could reduce the profitability of the kind of short-term, high frequency trading which has exploded in recent years and was at least partly to blame for the financial crash of 2008.

The core justification for a Robin Hood Tax, however, remains its redistributive power. More and more politicians are conceding that, as a major beneficiary of government support, the bloated financial sector must make a more meaningful contribution to public finance. If implemented at the EU level, an FTT could raise as much as €210 billion annually to tackle poverty at home and abroad. A well-designed tax would primarily fall on those trading in wholesale markets - banks, hedge funds, and speculators - not on ordinary people and businesses. As a briefing paper by Oxfam shows, most of the costs would be borne by wealthy institutions and the richest in society.

Decisive backing from the European Union will open the way for progress on a global agreement at the G20 summit in November and the COP17 UN climate talks in December. While national and regional FTTs are both feasible and desirable, many commentators agree that global implementation would be ideal. We urge David Cameron to listen to his electorate and lend his full support to this end.

Letter to the PM ahead of European Council

Rt Hon David Cameron MP
Prime Minister
10 Downing St
London SW1A 2AA

22 June 2011

Dear Prime Minister,

We welcome recent movement towards agreement on a Financial Transaction Tax (FTT) at European level and look forward to this being considered at the European Council meeting on the 23 and 24 June. The Robin Hood Tax Campaign[1] urges you to use this opportunity to signal your support for EU level agreement on a Financial Transaction Tax.

The need for new and additional resources to protect services, address poverty in the UK and elsewhere, and help countries adapt to the impacts of climate change has never been clearer. In the UK, this additional revenue could help end child poverty and protect social care. Innovative finance including from an FTT is also urgently needed to fill the Green Climate Fund agreed at Cancun.

It now seems likely that a broad-based FTT will be implemented by a group of willing EU nations. One likely option, a co-ordinated tax on share transactions, would be similar to the UK's Stamp Duty on shares and so would not require significant change in the UK. We strongly encourage you to support such agreement on an FTT at the European Council meeting. Furthermore, both France and Germany have also indicated that they would like to see the proceeds of any FTT spent in part on climate change and tackling poverty, which we hope you will also back.

Supporters of the Robin Hood Tax campaign around the world will be taking action on the 22 June in over forty countries. This includes the UK where the Robin Hood Tax campaign continues to strike a chord, with polls showing over 80 per cent of UK voters - including 87 per cent of Conservative voters - believing banks and hedge funds need to help pay for the damage their actions caused.[2]

This is one tax that would be uniquely popular, and could make a substantial difference to the fight against poverty and climate change at home and abroad.

Yours sincerely,

[For the full list of signatories, download the PDF version]

[1] A coalition of 115 domestic, international, faith-led and environmental organisations, who together have millions of supporters in the UK, and the endorsement of many economists and celebrities

[2] YouGov poll for Oxfam undertaken 7th - 14th March 2011.