The Labour Party leader and Shadow Chancellor have stated that a Labour Government would introduce a financial transactions tax – dubbed the Robin Hood tax — on the City which could raise unto £50bn. In 2015, Mr Corbyn attacked the Government for blocking the levy, which he claimed “would help prevent the sort of banking crisis we saw in 2008”.
A Robin Hood Tax is a tiny tax on the financial sector that could generate billions of pounds annually to fight poverty and climate change at home and abroad. Small change for the banks – big change for those hit hardest by the financial crisis.
Also known as a Financial Transactions Tax (FTT), a Robin Hood Tax is a tiny tax of about 0.05% on transactions like stocks, bonds, foreign currency and derivatives, which could raise £250 billion a year globally. FTTs are well-tested, cheap to implement and hard to avoid.
In fact, there are already lots of different transaction taxes implemented by many countries, including in the UK. They all work on the same principle: taxing every transaction a very small amount. We think there should be a lot more of them, particularly in areas not yet taxed, like transactions of bonds and derivatives.
Importantly, transaction taxes are also good in that they would reduce the number of the most risky trades, the gambling which helped to trigger the financial crisis.