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Labour pledges £26bn ‘Robin Hood’ tax on City

Shadow chancellor John McDonnell says City firms have paid £100 billion in bonuses since financial crisis and should contribute more to public services.

 
Labour pledges £26bn ‘Robin Hood’ tax on City

Labour has pledged to raise billions through a tax on financial transactions as part of a wider crackdown on wealthy individuals and institutions. 

Known as a 'Robin Hood' tax, shadow chancellor John McDonnell said the plan would 'make the financial sector pay its fair share' for the damage it caused in the credit crunch. 

'We bailed out the City 10 years ago when the crash came, we poured hundreds of billions of pounds into it. Since then £100 billion has been given out in bonuses in the City. So we are asking for a small contribution... to fund our public services,' he added. 

Labour's public services promises include a £37 billion injection into the NHS to improve waiting times and the performance of A&E units. 

McDonnell dismissed accusations from the City that this was simply a case of banker bashing. 

'It's not about punishing bankers or anything like that [but] tackling a couple of loopholes' in the system,' he said.

Labour's tax would widen the current 0.5% stamp duty paid on shares to other instruments such as derivatives. 

McDonnell also wants to end an exemption, known as intermediaries relief, which applies to a selection of banks and hedge funds. 

According to Labour's calculations, these two measures would boost the government's coffers by £26 billion if it wins next month's election. 

The Institute of Economic Affairs attacked the plan, which was described as a 'shambles' by the Tories. 

'[This is] another example of the fallacy that corporations can be tapped for cash with no wider costs,' said the think tank's chief economist Julian Jessop. 

'In reality, it's always ordinary people who ultimately pay, including consumers and workers.'

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5 comments so far. Why not have your say?

Gleaner

May 15, 2017 at 16:20

Would you walk through a wood knowing Robin Hood was waiting there to rob you. Or would you find a different route in a different place, like Paris or Berlin or Barcelona or Rome or Hong Kong, in fact any other county where there is no chance of meeting robin McDonell.

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Law Man

May 15, 2017 at 17:05

The critical aspect is whether a Tobin tax would cause banks etc to move trading to a different jurisdiction. In that even HMG will lose more than it raises.

Experience in Sweden shows that this will be the consequence. Sweden introduced but later abolished a Tobin tax for this very reason.

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Harry P

May 15, 2017 at 17:11

Am I wrong in thinking that the Treasury would have received some £40billion of that £100 billion already in income tax?

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White Stick follower

May 15, 2017 at 18:04

Political parties are offering a variety of 'sweeties', but beyond some astonishing turn of events Labour & the Lib Dems know that they have no chance of winning so can offer boundless'sweeties' for the masses in the sure knowledge that they will next to never have to come up to proof.

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Denis Parkinson

May 16, 2017 at 00:28

The regulation of the city is down to politicians, perhaps Gordon Brown (Labour Party) should be the one who is asked why the rules he was over seeing allowed such things to happen. Do you remember "Prudence" & the ever changing economic cycle figures that he manipulated. Good thing he disagreed with Tony Blair about the Euro though.

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