Robin Hood tax campaign-update

There has been a real breakthrough in the campaign for a Robin Hood tax otherwise known as the campaign for a financial transaction tax.

What is it?

The theory is that by levying a very small tax on certain types of financial transactions, huge revenue can be generated which can be used to offset the level of government debt or alternatively fund public expenditure.

In the UK, a tax of 0.1% (i.e. one pound in every thousand) on share transactions and 0.01% (i.e. one pound in every 10,000) on derivative transactions would generate £8.4 billion a year at current prices. These transactions are only undertaken by commercial organisations and not individuals. Replicated across the European Union, the figure would rise to in excess of £40 billion a year.

The union at national and youth level has been supportive of the campaign for a number of years. The campaign also featured prominently in the March for an alternative demonstration attended by half-a-million people in March 2011.

The arguments for this tax are entertainingly explained in a promotional video featuring Bill Nighy. This can be accessed at http://www.youtube.com/watch?feature=player_embedded&v=qYtNwmXKIvM

A breakthrough despite UK opposition

Not surprisingly, the UK government since 2010 has been highly and specifically resistant to this initiative, arguing it will discourage investment in the UK and therefore have a detrimental impact on both jobs and taxation revenues.

However, this is not a view shared by many other EU nations. In a breakthrough of great significance, at the end of January a group of 11 EU nations including France, Germany and Spain reached agreement with the EU as a whole that they would be able to implement their own versions of the Financial Transaction Tax in their own countries from the start of the 2014/15 financial year.

The breakthrough was all the more significant because only four countries out of the 27 voted against allowing this -the UK was one of the four. Overcoming the opponents of the FTT was therefore a significant achievement in itself.

Money and politics

If the group of 11 are able to implement the FTT in their own countries from April 2014 onwards, it is estimated that in the first year there will be revenues of nearly Euro40 billion.

This has great political significance for the UK because such an injection into public funds will become visible as we approach the 2015 general election.

Clearly with so much of Europe, including Germany (who are usually regarded as the main beneficiary of any flight of capital from the UK), now actively pursuing an FTT, it leaves the UK adrift.

This will become even starker if the United States also adopts a version of the FTT. Discussions between the European Union "block of 11" and federal authorities in the United States now intensify in order to try and build to a transcontinental consensus on this matter.

What next?

In the CWU, we should welcome these developments and also recognise that there is now a fresh impetus in persuading our own political parties that the case for an FTT is irresistible.

Discussions will now take place both internally and with the Robin Hood tax campaign about how to promote the breakthrough on continental Europe and press the case for a commitment to introduce an FTT into the UK. The role of branches, activists and individual members is sure to be important in this process.

The following links will be of interest:

Financial times article on the EU breakthrough: http://www.ft.com/cms/s/0/e82a3792-6a2a-11e2-a3db-00144feab49a.html#ixz

Expert blog on the consequences of the EU decision: http://blogs.reuters.com/felix-salmon/2013/01/30/europes-robust-financial-transactions-tax/

Robin Hood Tax campaign website: http://robinhoodtax.org.uk/

Additionally, an interview with Robin Hood Tax campaign director David Hillman can be found here (http://bit.ly/Vfd82).