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GETTING STARTED a Robin Hood Tax on the Banks Has the Power to Raise Hundreds of Billions Every Year Globally

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GETTING STARTED a Robin Hood Tax on the Banks Has the Power to Raise Hundreds of Billions Every Year Globally ROBIN HOOD TAX: GETTING STARTED A Robin Hood Tax on the banks has the power to raise hundreds of billions every year globally. Money that could protect public services in the UK, help the poorest people at home and abroad and tackle climate change. ROBIN HOOD TAX AND WHAT WE WANT TO SEE: INTERNATIONAL DEVELOPMENT: A BANK TAX THAT WOULD MAKE ROBIN WHY IT MATTERS. 3 PROUD. The effects of the banking crisis on developing countries We know that the Government could introduce didn’t get a huge amount of coverage in the UK. greater taxation on the financial sector to the tune Understandably enough, the focus was on the impact of £20bn a year. here, as the actions of a small minority wreaked havoc on the UK economy. But, unsurprisingly, a fire fuelled in wealthy countries also burnt millions of poor people – and MONEY FROM A ROBIN HOOD TAX GOING 3 TO THOSE WHO NEED IT. continues to do so. We suggest this money should be split: 50% to There are the inevitable pitfalls of globalisation, for starters. Spending falls in the UK. People buy fewer UK | 25% to Climate Change | 25% to International clothes. Shops order fewer clothes. Orders fall in factories Development. in poor countries. People are laid off and can’t find alternative work. And suddenly the global economic crisis THE UK BEING AN INTERNATIONAL 3 LEADER hits the market stall holder who used to sell lunches to the people in factories. And so on and so on. So we can help push for Europe-wide taxes on the The crisis also had a profound effect on poor countries financial sector. at the macro level. The UN has estimated that between 47 and 84 million more people have either remained FAST FACTS extremely poor or been forced into poverty by the Money raised from a Robin Hood Tax may be economic downturn. And an Oxfam study of 56 of the 1 small change for the banks but could make a huge world’s poorest countries found that it wasn’t just wealthy difference to the world. For example: states that responded to the crisis by borrowing – poor • countries did the same thing leaving a £40bn ‘hole’ in £5bn could pay for health care for 178 million people. their budgets. • £6bn could give every child a primary education They were forced to borrow locally at high interest rates, or to run down financial reserves. As a result, Each year, at least half a million women die from deep spending cuts have now inevitably followed – and 2 complications of pregnancy and childbirth. Just 1 education, social protection and pensions have all been midwife could save the lives of 219 women. One hit. Or, to put it another way, some of the world’s poorest minute of the Robin Hood Tax could help pay for people have had their chance of a better future swept 23 midwives. from under them. It is brutally unjust that the poorest people on earth FIVE WAYS YOUR MP CAN HELP: are made to pay the price – through cuts in schools or life-saving medicines - for a crisis started in the inflated banking sector. A Robin Hood Tax could make the 1. Request a briefing with the Robin Hood Tax bankers pay for the crisis they caused and help developed Campaign to get more information countries live up to their aid promises. Even as rich ([email protected]). countries return to growth, poor countries will struggle. 2. Show support for the Robin Hood Tax campaign by sending us a photo for our website ([email protected]). 3. Contact the Chancellor asking him to implement a Robin Hood Tax. 4. Ask a question in parliament. 5. Send a supportive press release to local media. TECHNICAL PART: ALL YOUR QUESTIONS ANSWERED WHAT IS A ROBIN HOOD TAX? CAN THIS WORK WITHOUT GLOBAL AGREEMENT? International agreement would be great, but it’s not vital. The IMF has clearly stated that Financial Transaction A Robin Hood Tax is a tiny tax Taxes exist in all the major financial sectors already, on the financial sector that could without driving business away. The best example of generate billions of pounds annually this is the UK which already has a tax of 0.5% on all to fight poverty and climate change share transactions, which raises about £3bn a year. Negotiations are continuing at international level. But in at home and abroad. Small change the meantime, individual countries can act alone. for the banks - big change for those hit hardest by the financial crisis. WON’T BANKS JUST MOVE THEIR BUSINESS OFFSHORE? There are many reasons why the banks would not leave Also known as a Financial Transaction Tax (FTT), the UK, not least that they need a big enough government a Robin Hood Tax is a tiny tax of about 0.05% on to bail them out if things go wrong. But the best evidence transactions like stocks, bonds, foreign currency and that they won’t leave is right here in the UK: our unilateral Financial Transaction Tax on shares raises more than derivatives, which could raise £250 billion a year £3bn for the Exchequer each year without a significant globally. FTTs are well-tested, cheap to implement and loss of business. Crucially, the tax is designed so that hard to avoid. no matter where in the world a UK share transaction In fact, there are already lots of different transaction takes place the tax can still be collected in the UK. A taxes implemented by many countries, including in the similar approach can be adopted for other Financial UK. They all work on the same principle: taxing every Transaction Taxes, meaning the threat of losing trade to transaction a very small amount. We think there should New York or elsewhere has been hugely overblown. be a lot more of them, particularly in areas not yet taxed, like currency transactions and derivatives. WON’T BANKS JUST PASS THE COSTS ON TO US? Financial Transaction Taxes are aimed at risky, casino- Importantly, transaction taxes are also good in that they style trading. Hedge funds and investment banks would reduce the number of the most risky transactions, dominate this market, so a Financial Transaction the gambling which helped to trigger the financial crisis. Tax would fall primarily on these companies and corporations. Even if these institutions did manage to WHY TAX THE FINANCIAL SECTOR? pass the costs onto their customers, the customer-base Because it’s responsible for a big part of the mess we’re of hedge funds and investment banks is mostly made up in. And it has an obligation to all of us to help clear of high net worth individuals, and not ordinary people. The IMF has studied who will end up paying Financial it up. Because the International Monetary Fund (IMF) Transaction Taxes, and has concluded that they would and many other financial commentators believe that in all likelihood be ‘highly progressive’. This means they the sector is under-taxed and has grown to become would fall on the richest institutions and individuals in dangerously large and destabilising for the global society, in a similar way to capital gains tax. This is in economy. Financial Services Authority (FSA) Chairman complete contrast to VAT, which falls disproportionately Lord Turner has described a portion of the financial on the poorest people.. sector as ‘socially useless’; it’s time for the financial sector to make a greater contribution to the society it WHAT HAS THE UK GOVERNMENT DONE SO FAR? serves. Chancellor George Osborne introduced a Bank Levy CAN THE UK FINANCIAL SECTOR AFFORD in January 2011 to generate £2.5 billion a year. That’s TO PAY? nowhere near enough – and it’s also partly offset by a cut in corporation tax. The sector’s profits and bonuses Yes, research by the Institute for Public Policy Research total more than £100 billion. One of the reasons the (IPPR) shows that the sector can afford another £20 government has not done more is the immense power billion in tax. Banking is the most profitable industry in of the financial sector in lobbying and influencing the world, 26 times more profitable than the average politicians. That is why huge public pressure is needed to industry. The IMF (International Monetary Fund) has convince the government it is more costly to ignore the defined a proportion of these profits as ‘excessive’. people than to ignore the banks. HOW TO GET A MEETING WITH YOUR MP MPs say that nothing works as well to gain their support as a real conversation. Your voice is powerful. Use your voice to make sure that your MP uses theirs. 1. BEFORE YOUR MEETING: 3. AFTER YOUR MEETING: •FIND YOUR MP • CONGRATS! Look up your MP at www.theyworkforyou.com to find You’ve done a huge thing in the fight for a Robin Hood out where you’re headed. Tax. Meeting your MP is the most powerful way to influence them and work on getting their support. • BOOK AN APPOINTMENT MPs hold meetings, usually called surgeries, with • SHARE THE NEWS their constituents on Fridays or the weekend Let us know how it went on Facebook or on the (Monday – Thursday they have responsibilities to be in website. Your news could help inspire someone else Westminster). You can find out where and when their to book that meeting. Or ask us for any extra info you surgeries take place through the MP’s website. Call or need for the next meeting. email to book an appointment.
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