On the same week that Bristol hosts its annual Festival of Economics, Green Councillors in Bristol have put forward a motion for Tuesday’s Full Council supporting a Financial Transactions Tax, also known as a ‘Robin Hood Tax’ or ‘Tobin Tax’.
The idea behind a Financial Transactions Tax (FTT) is a small levy on financial transactions such as the buying and selling of products such as shares, bonds and derivatives, which would discourage high frequency automated trading driven by computer algorithms. This sort of high-speed trading is thought to be a major factor in financial market volatility and which contributes to volatility in financial markets. Former Prime Minister Gordon Brown, due to speak at the Bristol Festival of Economics on Tuesday, supported the tax back in 2009 as a way to prevent further financial crises.
Perhaps more importantly, the FTT, a tiny tax of about 0.05% on transactions carried out by financial institutions, also has the potential to generate more than £5bn of additional revenue a year which could go towards funding the UK’s squeezed public services, investing in infrastructure, addressing poverty and fighting climate change. It is estimated that this funding could plug last year’s NHS funding gap, fix the adult social care crisis and hire 20,000 new teachers with money left over to build more than 70,000 affordable homes.
Cllr Denyer said:
“The effects of reckless banking practices in the City of London have been felt by every community in the UK and many around the world – it is only right banks now pay their fair share to repair the damage they have caused. The crisis in local council finances is really coming home to Bristol with plans to close libraries and pull funding from Parks and even core services like Children and Adult Social Care. In this context it doesn’t seem unreasonable to ask the banks to pay a tax of as little as 0.05% of their transactions.”
If Bristol City Council were to pass this motion, it will join 72 other UK Councils who have passed a similar motion, including neighbouring Bath & North East Somerset.
Cllr Denyer added, “Broad support from Councils and Councillors across the country and political spectrum would put pressure on the Government to adopt the FTT, giving them a clear mandate at a time when they need policies with cross party-support more than ever. I hope to add Bristol to that list to strengthen the case further. Unfortunately, as with last time, there will probably not be time to debate the motion this month. However, I will keep on submitting it until the debate takes place. I (and Robin) will be back!”
Molly Scott Cato, Bristol’s Green MEP, said:
“A Financial Transaction tax is small change for the financial sector but could go a long way to helping deliver economic and climate justice. Last December 10 EU Finance Ministers publicly declared their support for the tax. The UK of course wasn’t one of them and with Theresa May threatening to turn the UK into a low tax economy, Brexit makes it even less likely we will see this tax introduced in the UK. Even more important therefore that councils pile on the pressure by passing a motion of support.”
See motion text attached: Full_Council_Motion_-_cllr_Carla_Denyer.docx
– For info on how a Financial Transaction Tax might work see https://www.robinhoodtax.org.uk. The campaign has over a million supporters, including 115 different charities, think tanks and aid organisations, over 50 senior financiers and 1000 economists.
– At least 10 European nations including France, Germany, Italy and Spain are moving ahead with FTTs on shares, bonds and derivatives estimated to raise £19bn a year.
– According to the Local Government Association, English local government still faces a challenging overall funding gap of £5.8 billion by 2019/20 (https://www.local.gov.uk/sites/default/files/documents/5.20%20budget%20submission_06.pdf
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