Sunday Times article on the Robin Hood Tax
Sunday 14th March 2010An article by the Archbishop of Canterbury, Dr Rowan Williams, and Richard Curtis (Co-Founder and Vice Chair of Comic Relief, and veteran of the Make Poverty History Campaign) which appeared in the Sunday Times.
No-one is going to win the next election by promising to be nice to bankers. But it feels like a wasted opportunity to react to the current crisis in a vindictive way, asking for bankers somehow to be punished. The two of us could not come from more different areas of work – but we find ourselves united by a hope that out of the current financial problems, there might emerge something positive and radical that could turn the banking crisis into an unprecedented opportunity for the world. It might help to heal the breach that has opened up between banks and society at large by making the financial industry part of the solution not just the source of the problem.
There is a chance to introduce a tax that will recognise both the massive expansion of the financial services industry in recent years and the fact that taxation has never kept up with this – but also a tax that will generate really substantial resources to deal with the urgent global needs that can't wait for some miraculous turnaround in the economy. If we are serious about wanting to tackle real poverty at home or abroad, would we prefer to see an increased burden on domestic taxpayers or an innovative approach that looks for help to the enormous revenues of the financial world? There certainly is a profound connection between poverty and the banking crisis – we all know the new pressures on jobs and the poor at home – and the World Bank has estimated that two million more children could die as a result of the downturn.
The plan is to tax certain transactions between financial institutions – not burdening the High Street banks or the private currency transactions of holidaymakers, but targeting the hundreds of billions that flow between the big players in the financial industry. A tax of an average of 0.05% on these transactions – 50p in every £1000 – could generate something like £250 billion per annum.
The campaign in support of this has called itself the Robin Hood Tax – which of course belies the complexity of it. Neither of us are economists – but many senior economists do support this plan – and we are asking those very people who have for years used their brilliance to devise complex ways of generating money to benefit the banks, to now help devise a new structure of taxation on the banks that would benefit the world.
In a strange way, this article is addressed to many and to very few. We would encourage politicians and the public to get behind this campaign. But we are also asking a few very powerful people in the financial world to stop and wonder whether this might be a moment of enormous and strange opportunity – whether circumstances might not have put them in a unique position where they could be part of a real step forward for the world – a designated, international tax to help crack some of the world's heftiest problems.
The idea is that the money raised would then be split three ways. 50% would go to domestic governments – so that there would be a greater reservoir of resources to avoid cuts in basic services like education and health, and to fund more domestic programmes of poverty reduction and affordable housing. 25% would go towards assisting poorer countries to deal with the impact of climate change and to reduce their carbon emissions. Everyone knows there must be urgent action on the environment – but there are very few ideas how to fund it. And the last 25% would be designated for the fight against global poverty. It would give us a serious chance of meeting the Millennium Development Goals – making malaria a thing of the past, protecting the 500,000 mothers who still die in childbirth every single year, guaranteeing that every child gets an education, and much more.
It's important to remember that the burdens created by the financial crisis will weigh most heavily on the poorest countries. They didn't create this crisis; it seems only fair that those who did should be contributing to lifting that burden. Remember too that the poverty and environmental degradation that happens elsewhere in the world isn't something that will never touch us. This is a world where political frontiers don't protect us from ecological disaster and where poverty elsewhere becomes our problem in the shape of political unrest, new cohorts of refugees and migrants, and shrinking markets.
Of course it won't be easy to secure universal compliance among all nations. But many argue that even a country unilaterally imposing such a tax – perhaps starting with a currency tax – would generate a huge amount of fresh income and not lose its economic competitiveness. Could Britain take the lead and unilaterally champion the first steps towards a form of taxation that may radically transform the relationship between rich and poor?
In the last decade or so, we've seen a number of campaigns that have mobilised massive support from civil society – from churches and voluntary organisations and local pressure groups – in a way that delivered large-scale change. The Jubilee 2000 Debt Campaign – the Make Poverty History campaign. This is the next challenge for this kind of politics.
Sometimes, in the distance, you glimpse something new, our sense of responsibility widens. Once it was legitimate in this country to buy and sell slaves. 150 years ago, many people in the UK accepted that their fellow countrymen would die of hunger and disease. The welfare state was devised to battle against that. And we think that this Robin Hood Tax is a glimpse of the future – where there is proper international funding to deal with the largest problems facing the world.
As the General Election approaches, this does seem like a genuine opportunity for ethical vision on the part of our political parties. The extraordinary commitment shared by the parties to reaching 0.7 % of GDP for development funding creates an opportunity for moral leadership. Are the politicians and financiers ready to commit to reconnecting banking with real life – and real need? Are they ready to affirm that we are still as a society focussed on the development goals spelled out ten years ago and on eradicating poverty at home? Are they willing to lift their eyes beyond short-term issues and problems and to imagine a world in which those most at risk can be assured the best resources we can offer them?
If the answer is yes, then out of the mess of greed and fantasy that produced the financial meltdown of the last 18 months, a new hope will have been born for those who most need it, here in the UK and across the world.