Robin Hood Tax

Having recently moved to John Leech MP (Lib Dem)'s Withington constituency, I hope to be as impressed by his level of engagement with his constituents as I was with that of Kate Green (Labour, MP for Stretford and Urmston). Today, encouraged by Robin Hood Tax, I wrote him the following letter:

I would like to raise the issue of a Tobin Tax (financial transaction tax or 'Robin Hood Tax') on private banking institutions. Following the banking crisis, and the disbursement of public funds to banks, to shore up those which were judged 'too big to fail', risky financial practices have continued behind closed doors and beyond public scrutiny (and often beyond public comprehension).

Project Merlin's ambition of a ring-fence (or 'firewall') between commercial operations and high-street operations is a welcome initiative to reduce risk in the banking sector, but in my considered opinion, Project Merlin will not be implemented soon enough, nor will it go far enough to prevent the problem of 'too big to fail' and nor does it fully address the high-risk trading methods still being practised by banks in their often irresponsible search for profit.

A Tobin tax of 0.05% would, in all probability, contribute billions of pounds to the UK treasury's coffers, from institutions who often pay very little in direct taxation due to complex relationships with off-shore entities as well as tax avoidance schemes of various natures. This could be used to support the UK's 'green bank', to hedge against future bank failure (in schemes similar to the EFSF) or to contribute directly to vital front-line services such as the NHS which are currently being cut - in no small part due to the recession created by the credit crunch and banking crisis.

While it is true that the Tobin tax may well cause some harm to the financial sector (a significant tranche of Britain's economic activity), this harm will be specifically targeted at those trading high volumes in the most short-term and volatile markets. This is another up-side of this particular form of tax, as financial institutions would be encouraged to seek more long-term and stable investments for their portfolios (and by proxy for ordinary people's pension funds and savings), rather than engaging in such potentially harmful trades as 'short-selling' (vigorously criticised by US President Barack Obama). The potential negative effects on our economy are, in most projections, far outweighed by the increased stability in the financial sector, and most significantly by the vast revenues which such a tax would bring to the public purse.

Compared to the estimated £14,000 for every British Taxpayer which was paid to bail out the banks, a Tobin Tax is likely to have a vastly less significant effect on our economy than the bank bail-out, even without factoring in the huge amounts of tax revenue. The tax will also go a long way to preventing the types of risky financial practice which have caused so much damage to our pensions, savings and our economy at large.

South Africa, Argentina, Brazil, France and Germany all support a Tobin Tax. These countries would use the money raised to fund vital advances in sustainable development, to help reduce poverty and to tackle climate change. As you may well know, many ordinary British voters are behind this scheme, and have registered their support in various ways, including at RobinHoodTax

It’s wrong that the UK is finding obstacles instead of taking the lead. Will you please write to the Prime Minister and ask him to stop blocking the Robin Hood Tax at a European level? Will you vote for such a tax if the issue is raised in parliament?

A short video, which you may have seen, featuring Bill Nighy is available on youtube, and presents a strong case (though a less in depth one than presented above). A link to the video on ITV News's youtube channel, is here

Thank you for your time.

Feel free to copy and paste this to your MP - or to go to https://secure.38degrees.org.uk/robin-hood-email-your-MP to automatically find out who your MP is and email them.