Group of European countries agree to push ahead with Robin Hood Tax

Robin Hood Tax campaigners in Rome where the Eurozone Big Four met on Friday

A coalition of willing countries today agreed to press ahead with plans for a European Financial Transaction Tax (FTT). Their decision came after proposals for an EU-wide tax foundered in the face of opposition from the UK and a handful of other countries.

Speaking at the EU Finance Ministers’ meeting in Luxembourg today, Finance Minister Wolfgang Schaeuble said that ten countries were prepared to use the EU process known as ‘enhanced cooperation’ to work together to introduce the tax. The enhanced cooperation procedure requires at least nine governments to agree to work together on a proposal.

“My impression is that quite a number of member states strongly support the proposal of an FTT  in principle,” Schaeuble said after the meeting. “We should give it a try.”

Leaders of the four big Eurozone countries, Germany, France, Italy and Spain, also expressed their support for a common FTT at talks in Rome today.

“I am pleased that all four here have committed to a Financial Transaction Tax,” Germany’s Chancellor Angela Merkel said.

She added that the tax would be welcomed because “the people in our countries have the impression that the crisis started in the financial markets and that they have not contributed enough to the solution.”

French President François Hollande said the leaders would be pushing forward with the tax even without the support of all 27 EU countries.

“It can only come about through enhanced cooperation, and I, along with my partners, will make it so that the European council authorises us to enact that… as quickly as possible,” he said.

David Hillman, Robin Hood Tax spokesman, said: “We are delighted that a coalition of European countries has agreed to press ahead with a Financial Transaction Tax.

“But the UK public will be rightly angry that George Osborne is resisting efforts to make the City pay its fair share. A Robin Hood Tax would boost growth as well as raising billions to tackle poverty and protect public services at home and abroad. A fully functioning European FTT – combined with its continuing popularity with the public – will make this government’s opposition increasingly untenable.”

Nicolas Mombrial, Oxfam’s EU spokesperson, said: “At next week’s EU Heads of State Summit, as many governments as possible must join the French, Germans and other countries and show they’re ready to put the interests of ordinary people before those of the financial sector.

“To gain popular support, a significant part of the revenues should go to people who have been hit hardest by the economic crisis in poor countries, as suggested by Presidents Hollande and Barroso this week. Using the proceeds of a new tax only for EU projects or to pay down deficits would be a betrayal of the millions who support a Robin Hood Tax.”

Submitted by the Robin Hood Tax campaign

Running for Robin

Stamp Out Poverty’s Director is taking part in the British 10k run to raise money for the Robin Hood Tax campaign.

On Sunday 8th July, Dave Hillman will be running for Robin, complete with green tights, at the British 10k run in London.

Dave said: “I’m supporting the amazing work this campaign is doing to get a fair tax on the financial sector”.

The Robin Hood Tax is a tiny tax on the banks that could raise billions of pounds to fight poverty at home and abroad. Small change for the banks – big change for those hit hardest by the financial crisis.

Please give as generously as you can to help transform this inspirational idea into a brilliant reality.

Sponsor Dave

New poll shows banks aren’t paying their fair share

According to a survey, more than three-quarters of the UK public do not think the Government has done enough to ensure we are “all in this together” with a large majority saying that banks and the richest have not been asked to make a fair contribution, according.

The poll of more than 1,000 people carried out by Ipsos MORI for the Robin Hood Tax campaign, found that two-thirds (68 per cent) of the public thought City funding of the Conservative Party had a significant impact on the Government’s regulation and taxation of the financial sector.

It found that 71 per cent thought banks and the financial sector are “not being asked to pay their fair share”. The corresponding figure for high income earners was 67 per cent.

David Hillman, Robin Hood Tax campaign spokesperson, said: “This is the clearest evidence yet that the public is tired of the Government’s failure to make banks pay their fair share to society. People are tired of seeing their schools and hospitals cut while a sector that relied on taxpayers’ money to survive gives lottery-sized bonuses to bankers whatever their performance.

“It is time the Government acted in the interests of the whole country not just one square mile. The City may give the Conservatives half their funds but it accounts for just 10 per cent of the UK economy.”

The poll shows the public have clearly identified the City and high earners above other groups as not paying their fair share. Only 3 per cent cited low and middle income earners. Public sector workers and business were cited by only 7 per cent and 15 per cent respectively.

Of the two-thirds of people who said the fact the Conservatives receive more than 50 per cent of funding from individuals and companies involved in the financial sector would lead to bias, 27 per cent said it would make a great deal of difference and 41 per cent a fair amount. Only 3 per cent said City funding of the Conservatives would have no affect on the Government’s decisions.

The Robin Hood Tax campaign is calling on the Government to back international moves in Europe and beyond for a financial transaction tax (FTT). Extending the UK’s current tax on share transactions to bonds, currencies and derivatives could raise an additional £20bn to tackle poverty at home and abroad and fight climate change.

The campaign has won the support of Bill Gates, the Archbishop of Canterbury, the Vatican, the first ministers of Scotland and Wales and more than a thousand economists. At the G20 summit in November, France, Germany, Spain, Italy, South Africa, Brazil and Argentina backed an FTT and a proposal for an EU-wide FTT is currently being championed by the European Commission.

What a week for the Robin Hood Tax Campaign!

In the days leading up to yesterday’s European Growth summit in Brussels, a Global Week of Actions took place in more than 35 countries to put pressure on leaders to back a financial transaction tax (FTT) and ensure proceeds are used to tackle poverty and climate change.

Here are just some of the highlights from what has been an incredible week for the campaign:

As G8 leaders met at Camp David (USA), where discussions were dominated by the Eurozone crisis, the National Nurses Union (NNU) won their battle with the mayor of Chicago to hold a RHT rally. More than 1000 nurses took to the streets and called on world leaders to introduce an FTT which would raise billions of dollars a year to help meet the rising costs of the banking crisis, protect public services at home, and tackle poverty and climate change abroad. The nurses created a media storm in the US and made front-page news of the Chicago Tribune. You can see more pictures from the rally here and watch an excellent short film from the event.

Nurses march through Chicago wearing their Robin Hood hats

Throughout the week Robin Hoods gathered on Mount Fuji in Japan, outside Big Ben in Britain, in Italy, India, Brazil, Zambia, Malawi, Belgium and more – representing a movement of millions spread across five continents. Take a look at the Global Week of Action photo gallery.

Robin Hood Tax – India

Robin Hood Nurses make front page news

 

 

 

 

 

 

 

 

 

 

At the same time 200 civil society organisations from 18 European countries (including NGOs, trade unions and faith groups) wrote to European Heads of States urging them to show their support for an FTT and to reach an urgent agreement on its implementation. The letters were received just days before the European Parliament voted overwhelmingly in favour of the FTT (487 to 152). With a decisive majority in support of the FTT, the European Parliament has sent a strong signal to governments to move ahead with the tax.

The global momentum and reach of the campaign has now been confirmed, with the Robin Hood Tax making it’s way into the Oxford Online Dictionary. Defined as:

A tax aiming to redistribute resources in order to achieve greater social equality, especially a proposed tax on transactions made by financial institutions

Whilst all week citizens from across the world have been calling on leaders to implement an FTT, David Cameron chose to ignore these voices as he continues to stall progress on the FTT in Europe. In a statement following yesterday’s EU Summit, he said:

The Financial Transactions Tax is a bad idea – it will put up the cost of people’s insurance, put up the cost of people’s pensions, it will cost many, many jobs. It will make Europe less competitive and I will fight it all the way“.

Every point Cameron makes is false!

• An FTT would actually boost economic growth and competitiveness. According to the European Commission, growth in Europe would increase by 0.2% to 0.4%.

• An FTT would help create new jobs. Avinash Persaud (a former City figure) shows that 75,000 new jobs would be created in the UK alone.

• Ordinary citizens will not pay the cost of the FTT. It will be paid by the buyers/sellers of financial assets – these are banks and other financial institutions, such as hedge funds, whose clients are often high-net-worth individuals. Ordinary people do not trade bonds or derivatives.

• FTTs will not affect our pension funds. Pension funds invest over the long-term, they turn over their portfolio only once every 2 years. A tiny tax applied at entry and exit from the market would therefore be negligible.

• Of course Cameron will fight the FTT “all the way”. It is disappointing but should not come as a surprise that he puts the interests of his friends in the City above the interests of the country.

Nurses vs. Bankers at Barclays annual meeting

Tug of war - Robin Hood Tax vs. Banker

New figures show that UK taxpayers effectively subsidise the pay of each and every investment banker at Barclays to the tune of £420,000 a year – an amount that could pay the annual salaries of 17 nurses.

Investment bankers are enjoying this subsidy despite Barclays reporting a statutory pre-tax loss of £475m yesterday and continuing to hand out excessive remunerations. Chief Executive Bob Diamond received £17.7 million in salary, bonus and benefits despite admitting his bank’s performance was “unacceptable”. This was a key agenda point at the meeting where shareholders will vote on bank’s pay policies, with a majority expected to vote against the pay deals.

And so today the Robin Hood Tax campaign headed to the Barclays annual meeting to get our message heard.

Check out David Hillman, spokesman for the Robin Hood Tax campaign, being interviewed for BBC News 24 explaining how ‘the financial sector has over decades been making too much profit. It has been paying itself too much remuneration – they should be taxed more, and that money should be used to protect jobs here and save lives abroad

City stopping the Financial Transaction Tax (FTT) through donor dinners at No.10

We all now know that Conservative Party Treasurer Peter Cruddas has been selling secret meetings with David Cameron and other senior party figures in return for donations. Cruddas was caught on camera explaining that £250,000 would get you ‘premier league access’ to the PM and government policy.

Cameron has revealed the party donor ‘dinner guest list’ at number 10. At least five are top city figures: Michael Hintze (hedge fund manager, former Goldman Sachs), Paul Ruddock (hedge fund manager), Michael Farmer (hedge fund founder), Henry Angest (banker), Michael Spencer (icap founder).

We now learn that the FTT has been a topic of conversation. This was revealed by Michael Spencer (the City tycoon who owns ICAP, the biggest broker of financial transactions in London and therefore with the most to lose from the FTT) in an interview with Risk Magazine:

“I have had it first-hand from very, very senior members of our administration who I know personally and have had good relations with for a long time, that it [the FTT] will be vetoed without any doubt and without any reservation at all”.

Interestingly Michael Spencer was the Tory Treasurer before Peter Cruddas. According to political blogger Guido Fawkes, Spencer was given this reassurance by the PM “over dinner”.

David Hillman, Director of Stamp Out Poverty, said: “It is not exactly a surprise to learn that the Conservative Party are in the pockets of the City, just disappointing, disillusioning and depressing to find out how business is really done. If anything it makes our resolve as a campaign even stronger to win a Robin Hood Tax in Europe”.

‘Tax the banks, not the poor’ sentiment overwhelms budget

Robin Hood’s mantra has been causing quite a stir this week.

The recent Budget has been labeled a ‘Budget by the rich, for the rich,’ particularly because of the reduction of the 50p tax rate to 45p from next year.

Simon Chouffot, spokesperson for the Robin Hood Tax campaign said “This is less a ‘Robin Hood’ Budget and more Sheriff of Nottingham – protecting the privileged few at the expense of services for the poorest.

Osborne is barking up the wrong tree in this Budget. He won’t bring down the deficit and protect those at the bottom by letting the richest off the hook. If we are really going to ‘earn our way’ out of this economic mess we should be asking the City of London to pay its share. Yet tweaking the bank levy will raise no new money from the Square Mile. This is another good Budget for bankers.”

UK Uncut, Robin Hood Tax campaigners and anti-austerity protestors brilliantly managed to over-shadow MPs reactions to the Budget by chanting ‘tax the banks, not the poor’ which was the soundtrack to all news coverage. Tim Farron, President of the Liberal Democrats said that he didn’t know why the Conservatives were cutting the top tax rate, whilst Chris Leslie, Shadow Treasury Minister said that Labour wouldn’t be endorsing this cut. The public anger evident from this clip is what really stands out.

Paul Kenny, general secretary of the GMB, said: “The different treatment of people at either end of the income scale is stark. Ordinary families are losing their tax credits and child allowances and suffering pay freezes while people on top salaries of £150,000 to £1 million a year are getting cash hand outs.” 

The Budget has also announced a freeze on the tax-free personal allowance of pensioners and is being dubbed the ‘granny tax.’ However, effects of the hardest hit are yet to come – the emphasis on cuts in expenditure that have never been tried before.

Dave Prentis, General Secretary of the union Unison, really hit the nail on the head: “if the 50p tax rate wasn’t effective because people avoided it, the correct action was not to lower it but to make sure people paid it.”

This has been a sad week for people fighting to save the NHS, fighting for justice for the 99%, and fighting against austerity.

One highlight was the fantastic Budget stunt – several hundred protestors were brought together by UK Uncut activists to form a dole queue outside Downing Street. The aim was to recreate Saatchi & Saatchi’s 1979 Tory election campaign ‘Labour isn’t working’ to highlight rising unemployment with a play on words: ‘austerity isn’t working.’

Their efforts were rewarded with coverage on BBC News at One, Six and Ten.

Check out footage of the action featured on the Guardian’s website

“The Chancellor’s Budget has given a helping hand-out to his rich friends in the City and delivered a slap in the face to the unemployed and low paid families.”

A Robin Hood Tax can help to redress the balance of both UK and global inequality. We need to keep telling George Osborne that the cuts aren’t working. Be part of the world’s biggest bank job and ask your MP to support a Robin Hood Tax now

A Report by Professor Avinash Persaud rebuts “disproportionate, inconsistent and disingenuous” attacks on FTT

Professor Avinash Persaud argues that an FTT would increase growth and jobs in Europe

A new report released yesterday aims to systematically dismantle critics’ exaggerated visions of the effects of an FTT on our economy. ‘The Economic Consequences of the EU Proposal for a FTT” report states that a Robin Hood Tax would be good for the UK’s economy, have a positive impact on jobs and growth, and cost the finance sector’s customers far less than the fees bankers levy themselves.

Furthermore, Professor Persaud, a former head of Currency and Commodity Research at JP Morgan, states that the EU’s proposed tax (which is less ambitious than we would like, but welcome nonetheless) would raise £8.4bn in tax revenue for the UK Treasury. It would, contrary to the EU’s own initial and flawed impact assessment raise GDP by 0.25%, equivalent to creating 75,000 jobs in the UK alone. However, the best myth-busting fact in his paper is the comparison between the impact on transaction costs of a 0.1% rate on derivatives, and the amount of money that bankers take out of the system in fees and charges, which amount to tens of billions every year.

The report also points out that the proposed FTT rate of 0.01% – 0.1% is rather modest when compared to other transaction costs such as trading commissions, fees for clearing and administration costs. An FTT would only increase transaction costs to levels seen ten years ago, when arguably the markets were more stable. Seven countries already raise £15.3 billion annually through long standing FTTs. One of the largest and most successful examples is right here in the UK – the stamp duty on shares that raises the government more than £3bn a year.

Even if a Chinese investor uses a French bank in New York to buy a British share, they would still have to pay the tax. This means far from it leading to a loss of business in the UK, around 40% of the tax is paid by non-UK residents.

According to the report, critics’ analysis is “dangerously incomplete” since it focuses only on where the revenue is collected and not where it could be spent. An estimated £8.4bn of additional revenue in the UK could have a huge positive impact: it is enough to avoid all cuts to the education budget, halve cuts to the annual welfare budget or fund the Green Investment Bank three time over.

More fundamentally, a low-rate FTT would would help reduce ‘noise trading’ – a churning mass of short-term speculation that feeds off underlying market trends. Such trading intensifies the boom times, helping to create a mirage of value, but also helps to exacerbate the busts, when in a flash, it disappears.

Professor Persaud asks his fellow bankers the entirely pertinent question: if something as small as an FTT would allegedly cause such damage to investors and the operation of the markets, how much more damage is being done by the fees and charges which dwarf the revenues likely to result from the tax?

This report has received great coverage in the mainstream media and online. Here’s a selection of the best:

Anthony Hilton, Evening Standard “It’s a thing of beauty: ‘A tax that could set the City on its feet” http://www.thisislondon.co.uk/business/business-news/city-comment-a-tax-that-could-set-the-city-on-its-feet-7565094.html
The Guardian “Don’t believe bankers’ warnings about a Robin Hood Tax” http://www.guardian.co.uk/commentisfree/2012/mar/13/dont-believe-bankers-robin-hood-tax
A blog on the report by Simon Chouffot from the Robin Hood Tax campaign, for Left Foot Forward  http://www.leftfootforward.org/2012/03/financial-transaction-tax-economic-consequences-report/
Professor Persaud has also been interviewed for CNN, BBC World, BBC World Service, France 24

France pulls punch on financial transaction tax

President Sarkozy champions the FTT

This week France announced its plans to unilaterally impose a 0.1% tax on financial transactions starting in August, regardless of whether it is implemented in other European countries.

The French FTT will cover centrally settled transactions in French shares (possibly options on French shares as well) and will generate €1 billion a year.

The tax is among a series of measures announced by Sarkozy to stimulate economic growth and go towards “cutting the deficit.” Speaking on French television, President Nicholas Sarkozy said:

“What we want to do is provoke a shock, to set an example…There’s no reason why deregulated finance, which brought us to the current situation, can’t participate in the restoration of our accounts.”

The Robin Hood Tax campaign welcomes Sarkozy’s move to impose the tax, made despite heavy opposition from France’s banking industry.  Spokesman David Hillman said:

“Sarkozy has shown he is capable of reining in the banks and ensuring they pay more in tax. Why then is David Cameron so resistant when the idea is backed by the British people?

“If he’s serious about us ‘all being in this together’ he needs to get on and introduce Britain’s own tax to make banks pay their fair share.”

However this is only a small victory, and falls short of expectations of our French campaigners.  The expected €1 billion in revenue raised is disappointingly low. The potential revenue could be increased significantly should the FTT include more financial assets (such as bonds and derivatives) and the tax rate increased (similar to the UK’s Stamp Duty of 0.5%).  More importantly, according to Sarkozy’s statements, the revenue raised would not be used for tackling poverty and climate change – but instead to fill budget deficits.

But this is definite progress and over the next few weeks the campaign will lobby for increasing the revenues and ensure that a proportion is devoted to development and climate change.

The FTT will bring more equity and considerable additional revenues

EU Commissioner Algirdas Šemeta argues that the FTT will bring more equity and considerable additional revenues

In an article in the leading German newspaper Süddeutsche Zeitung, European Commissioner Algirdas Šemeta qualifies the arguments of the opponents of the FTT as “irresponsible.” He goes onto debunk the myths which they build up, particularly with regard to the alleged consequences of the tax on growth,  jobs and retail business.

An all-round great read:

It is irresponsible to instigate fears

Little by little the financial transaction tax approaches its implementation. There is increasing consensus on many aspects of the Commission’s proposal, and with regard to the remaining controversies there are constructive contributions being made.  Simultaneously a massive wave in support for the FTT has emerged among citizens. For them, the benefits of this tax are clear: An equitable distribution of the tax burden, a more stable financial sector and considerable additional revenues.

The more the financial transaction tax approaches implementation, the shriller – hardly by chance – the rhetoric of its opponents. They twist the Commission’s official data and thereby invent apocalyptic scenarios concerning the impacts of the tax on growth, employment and competitiveness.

Instigating such unfounded fears is inexpensive and irresponsible. An open and straightforward debate on the FTT is, of course, of central importance, but it must be based on facts. And it must be conducted with the sense of proportions and really refer to the existing proposal. It is time to get rid of some of the myths surrounding our proposal for a Financial Transaction Tax.

First of all, concerning the economic impacts in the EU, the FTT will neither damage growth and competitiveness nor lead to more unemployment. From an isolated perspective every tax causes economic costs. However, the costs of the FTT are small and, absolutely legitimate, given the enormous support the financial sector has been granted in the recent years.

Furthermore, the costs have to be offset against the positive effects from the use of the revenues of the FTT. If the expected annual 57 billion Euros are used to consolidate national budgets, to lower other taxes or to invest in public services and infrastructures, the financial transaction tax will surely have a positive impact on growth and employment in Europe.

Secondly, forget the argument that ordinary citizens and enterprises will have to shoulder the main burden of the tax. Firstly we must remember that current account operations by citizens and enterprises do not fall under the tax.  85 percent of the transactions affected by the FTT are operated exclusively among financial institutions. Even if the financial sector should pass on a part of the costs to its clients, this would be negligible: for example, if somebody is purchasing stocks for 10.000 Euros, they can easily afford a tax of 10 Euros for such a transaction.

Finally, those who allege that the FTT will lead to a massive flight of financial markets from Europe have either not read or not understood the proposal of the Commission. Precisely in order to prevent tax evasion, the proposal contains measures to mitigate this risk: a low tax rate, a broad tax base and the “home country principle.” If financial actors want to avoid the FTT, they would have to completely give up their European clients. This is rather unlikely to happen.

Those who combat the FTT must be asked, which alternatives exist? Many member states have reached the limit of what they can bear as austerity measures. Should this small tax on the financial sector be worse for growth and competitiveness than a further increase of income and corporate taxes or further cuts in public expenditures?

If the ordinary citizen must accept higher taxes on wages, food and fuels as well as restrictions on basic public services, can it not be expected, that the financial sector too contributes its part?

The FTT opens the possibility to unlock a significant source of revenue and to rebalance the tax burden – and to make it borne by those who can afford it.

Translation: Markus Gaudek and Peter Wahl