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January 25, 2013 / politicsbitesize

The Robin Hood Tax gets the go ahead – in Europe!

Robin HoodOn the same day that David Cameron delivered his long awaited speech on the decision to hold a referendum on Europe, a financial tax on the banking industry was given the go ahead by the European Union (EU). From Monday 22 January, 11 EU countries will implement the long awaited Financial Transaction Tax (FTF).

The FTF, or Robin Hood Tax as it is sometimes referred to, is a fee paid any time a person or business buys or sells a share of stock, a bond, a futures contract, an options contract, or any of the commonly traded financial instruments.

For years campaigners across Europe have made great efforts to persuade politicians that the FTF must be imposed on the banking industry.  The campaigners highlighted the fact that by imposing a tax on financial transactions some £30bn could be raised each year.  The ethical argument, that the banks should be made to pay taxpayers back for bailouts, was also put forward and the notion has clearly made an impact.

Christine Lagarde, current Managing Director of the IMF, agreed that, ‘the financial sector must contribute more’ and stated in her address to the World Economic Forum held in Davos this week that bankers’ pay should be cut in order to close the gap between the rich and the poor.

A spokesperson for the Robin Hood Tax campaign here in the UK, David Hillman, said: ‘We’re delighted that in Europe at least, the public interest has trumped the profit of a privileged few … But as we know, some countries – including the UK – are refusing to budge. The Government can’t justify turning down billions in revenue to protect the super rich in the City. They consistently choose to cut services for the poorest instead’.

In his speech on Wednesday, Mr Cameron stated that he would seek a full EU treaty renegotiation that would be beneficial to Britain.  Readers are to be reminded that in December 2011 the Prime Minister vetoed the fiscal compact treaty in order to protect the City of London from changes that were being implemented by the EU.  It might be supposed that David Cameron’s ‘renegotiation’ will include a clause that could protect the British banking industry from regulations such as the FTF.

It is a huge pity that the present UK government is looking to seek a change to the relationship with Europe, particularly in light of the good news on the FTF that has come out of the EU this week.  As David Hillman has asserted, ‘The UK is isolated on this issue and we need to make them feel it!’  More pressure must be placed on the Coalition Government and those in opposition to stop protecting the City of London and instead to start implementing a financial tax that will raise the amount generated by the UK Treasury by billions.

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