At the height of Make Poverty History back in 2005, in the Cabinet Room at No 10, Richard “Four Weddings and a Funeral” Curtis asked then PM Tony Blair, “would you mind if I showed you a video I’ve made?” It’s not the same as some bloke at work offering to show you his holiday snaps. So when Richard Curtis showed his new Robin Hood Tax video to some of the 85 national organisations supporting the latest big campaign in the TUC General Council Chamber earlier this month, we knew we were in for a treat. There’s already a German version, made with different actors. But the message is the same: we’re calling for a small tax on financial transactions to pay for big change for everyone.
Transaction taxes have a lot of popular support (the campaign’s facebook site attracted 100,000 fans in just nine days), but also a lot of heavyweight supporters. European leaders in Austria, France and Germany are supportive. Economists like Jeffrey Sachs, Paul Krugman and Joseph Stiglitz are high profile backers, but the campaign has released a letter from 350 economists around the world who support the idea. In Britain, Vince Cable, FSA chief Lord (Adair) Turner and Gordon Brown have all backed transaction taxes.
The devil, of course, is in the detail. What we are proposing is a tax varying from as little as 0.005% on wholesale currency transactions up to the existing 0.5% stamp duty on share trading. Some of the riskiest behaviour – such as betting on currency movements over hours or even minutes – will decline in response to such a tax, and that’s no bad thing. But even so, we have calculated that if implemented globally, such taxes could raise £250 billion a year for public services, tackling global poverty and coping with climate change.
The question we’d like to put on the political agenda, however, is not “should we have a Robin Hood Tax?” It is the rather more pressing question of how else we are going to pay for the costs of the global economic crisis. The bank levy that President Obama has suggested is a sensible way to insure against the costs of bailing out the banks. But that doesn’t address the damage caused to the public finances by the impact that the financial crisis had on the rest of the economy. Across Europe, 7 million people lost their jobs over the last couple of years. Globally, over a trillion dollars was pumped into the world economy to stabilise, shorten and reduce the depth of the recession. It was the right think to do. Across the OECD, more than ten million jobs were saved.
But now we need to find a way to pay for restoring the public finances, as well as tackle the unfinished business of the Make Poverty History campaign (even the pledges on overseas aid made at the Gleneagles G8 have fallen $22 billion short) and make a start on the challenge that the Copenhagen climate conference failed to address. No opponent of the Robin Hood Tax has said how else those challenges can be met, but the answer is clear. Massive cuts to public services on the one hand, or huge increases in other taxes like VAT.
There are still issues to be worked out about how precisely to introduce the tax, what precise transactions should be covered, how to ensure the costs aren’t simply passed straight on to consumers. We don’t want to make an enemy of the bankers whose activities will be taxed – we want them to help design the system so it works.
Getting agreement on a global tax won’t be easy The Government could make a start with a small currency transaction levy in the Budget next month – which would still raise billions. The European Union could implement a continent-wide transactions tax, and show the leadership it needs to show to keep Europe working and keep it popular with its citizens.
But if we don’t start discussing what we are going to do, and how it can be done, then we will be left with a huge hole in the public finances, people continuing to die of treatable diseases in developing countries, and deforestation, floods and famine as climate change takes hold.
Richard Curtis is keen on happy endings, as his movies show. That’s essentially what the Robin Hood Tax could be. Turning a crisis for the banks into an opportunity for the world.
Owen Tudor is Head of European Union and International Relations at the TUC.
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