Skip to main contentSkip to navigationSkip to navigation
Aerial view of Canary Wharf
Skyscrapers dominate the skyline in the London borough of Tower Hamlets. Photograph: Jason Hawkes/Getty Images
Skyscrapers dominate the skyline in the London borough of Tower Hamlets. Photograph: Jason Hawkes/Getty Images

Why councils should get behind the Robin Hood tax

This article is more than 10 years old
Three days of implementing a tiny tax on banks' speculative trading would pay for at least 1,000 new affordable homes

The skyscrapers of HSBC and Barclays dominate the skyline in the London borough of Tower Hamlets. They loom alongside Canary Wharf, a 50-storey monolith of financial might. The economic crisis may have started high up on those trading floors, but other than a few regulatory charges and fines, they haven't felt the effects. The UK's five biggest banks' core profits actually rose by 45% to £31.5bn in 2012.

In the shadows beneath, it's a different story: 57.7% of children in Tower Hamlets live in poverty, the highest rate in the UK. Of the £14.4bn shortfall in funding facing councils in England by 2020, it is the most deprived areas, like Tower Hamlets, that will be hardest hit.

The Local Government Association has estimated that council income will be slashed in real terms by 27% by 2020. Job losses, wage freezes and cuts are also having an impact. Office for National Statistics figures show that the average income per individual householder in Nottingham, the poorest city in the UK, is just £10,834 a year – compared with £16,034 for the rest of the country.

That's why we should celebrate that Robin Hood last week made a rightful return to his home – Nottinghamshire county council voted through a motion in support of the Robin Hood tax.

It calls on the government to implement a tiny tax on banks' speculative trading to raise much-needed revenue. The size of the UK's financial sector means this could generate an additional £20bn, providing much-needed revenue that could reverse many of the most damaging cuts.

Across the country, from North Lanarkshire and Edinburgh city in Scotland, to Torfaen in Wales, to Corby, Oxford, Islington, Lewisham, Portsmouth and Brighton in England, councils are tabling and passing motions in support of the tax.

Just three days of Robin Hood tax revenue would pay for at least 1,000 new affordable homes. In just over five days it could pay for 10,000 newly qualified teachers to be employed for a year.

For anyone who says passing motions on a Robin Hood tax is fanciful, they should look to the £25bn raised in 40 countries from such taxes annually. Financial Transaction Taxes (FTT) exist in major financial centres such as Hong Kong. Britain also has one – the stamp duty on shares that raises the exchequer £3.5bn a year. Brazil, for example, channels a proportion of its FTT revenue into local government spending.

Robin Hood doubters should look to the eleven European governments of both the left and right, including France, Germany, Italy and Spain, who are pushing ahead with an FTT.

As the European Commission tax chief, Algirdas Semeta, put it recently: "Taxing the financial sector is a question of fairness. Banks and financial institutions received – and continue to receive – massive support from the public sector to overcome the crisis."

Unfortunately, the UK government doesn't see it this way. Fulfilling the role of sheriff of Nottingham, George Osborne has not only refused to sign the UK government up, but has also launched a legal challenge against the European FTT.

By curbing some of the worst financial sector excesses, a Robin Hood tax would help to rebalance the economy, giving other sectors and regions a chance to shine.

The hope is that other councils will follow the lead of their fellow local authorities and pass motions in support of the Robin Hood tax, putting much-needed pressure on the government. It is not despite councils' focus on local communities that their voices must be heard on this issue, but precisely because of it.

Simon Chouffot is a spokesperson for the Robin Hood tax campaign.

What do you think? Email sarah.marsh@theguardian.com if you want to contribute an article to this debate.

Not already a member? Join us now for more comment, analysis and the latest job opportunities in local government.

Comments (…)

Sign in or create your Guardian account to join the discussion

Most viewed

Most viewed