Robin Hood Tax and the British Bankers’ Association | The Robin Hood Tax

Robin Hood Tax and the British Bankers’ Association

March 15th, 2010 by Robin Hood

Posted in: Action reports, Campaign updates, In the news and on the web, Latest, Top stories


Many supporters have asked what do the bankers think of the Robin Hood tax? On Sunday, Graham Allen, MP for Nottingham North finally got a chance to ask that question to the British Bankers Association.

On Wednesday, Graham Allen championed the Robin Hood Tax in parliament. On Sunday, Allen took the discussion to Angela Knight, the Chief Executive of the British Bankers Association in a televised debate on the BBC East Midlands Politics Show.  Angela Knight stepped into the role played by Bill Nighy in the campaign video of the unconvinced banker, prompting the presenter to ask , ‘is this parody too close to the mark?’.


Allen describing himself as the ‘bankers friend’ urged the banks to take this opportunity to restore their reputation and use ‘their help and expertise to find this tax and help develop it.’ Knight agreed the campaign raised a serious issue that needed to be considered both in terms of what the tax is and what it could do.   Knight argued that banking was international and so the solution would need to be international. We believe there is lots they could do to help the UK take leadership on the world stage by helping to implement this tax first in the UK.  Although Angela remained unconvinced she  did agreed to meet with the campaign to discuss the idea further. Watch this space.

Watch the debate for yourself on iPlayer. Starts at 50:30 >>

Posted in: Action reports, Campaign updates, In the news and on the web, Latest, Top stories

  • Murphy Mcmarblegargle
    If you tax banks on certain transactions then you have to institute some way of keeping the banks from raising their penalties and charges for individuals who opt to use those certain taxable transactions, because that’s exactly what they are going to do.

    If you make the tax based on, say a flat rate then they are going to simply charge the flat amount of the tax to the clients and users to cope for the banks lost funds.

    If you tax them on a fixed proposal, well then they are going to manipulate numbers in similar fashion to cope for the loss in revenue to taxable transactions.

    Might have to vote “No” on this idea unless you can keep the banks from doing what I just described.

    Why not just get rid of the banks once and for all?

  • RabbitNexus
    If abuse by the targets of any legislation was the deciding factor, ie: They’ll just breach the law, so why make one, was the benchmark, I’d hate to see what we were left with. That said I am an opponent of excessive legislation, and believe 9/10ths of laws are unneccesary and just hindrances on our peace and security.

    One way to make adherance to the law effective, is by intro0ducing severe penalties for breaching them, such that you risk being thumped many times harder for NOT doing what you should than if you just paid the tax and moved on. I’d suggest a reward system for anybody who blows the whistle on any fraud of the Robin Hood Tax, so substantial that people will be HOPING for the big break of actually catching their employer out in such an act. This removes the usual impediment to whistleblowing. Then bankers who are found to be defrauding the Robin Hood tax, must be dealt with severely. Much like we used to deal with any actual instance of proven fraud. This entails a return to the rule of law of course which appears to have become a thing of the past lately as far as major financial fraud is concerned.

    On the whole I think it will fail, due to the corruption of governments (the last resort for control) and the insane level of greed and corruption amongst the Banksters, which is why I still advocate rounding up all bankers and hanging them from any convenient supporting structure. A tree, a lamp post, a swing set….

  • robynstewart
    Guys, I have to tell you, I am ENTHUSED about the Robin Hood Tax over here across the pond!! I think it’s the BEST idea to come down the pike in a long long time!

    So pleased was I, that I began to call all the Senators in Congress that I could think of that have ANYTHING to do with banking and/or raising funds. I got several staffers interested but have heard NOTHING in the news over here.

    I would be pleased to help spread the word over here. Do you have anyone in line in the U.S. to try to push internationally? I can suggest several progressive websites such as FireDogLake and Please help get people interested over here! Over here we really could use the funds to pay for public health care! That would shut the obstructionists up (mostly Republicans) who are whining about how it would bankrupt the government. They would have no comeback against something like this!! Please, get in touch with some progressive organizations over here and get them interested. I will do anything I can to help.

  • Thank you Robyn. There are plans afoot in the US but they are at an early stage. I’ll forward your details to the relevant people if that’s ok?

  • Banking and the Credit Crunch may be international but many of the problems in UK banks were internal and national. It really is time Angela Knight opened her eyes to what was happening in British banking because the FSA is not the only regulator or authority that failed. The British Banking Industry has, with Ms Knight’s at the helm, defended some really appalling behaviour and I have never once heard her say anyone or anything in the banking industry is to blame for anything.

  • britishbankers
    British Bankers’ Association here. You are absolutely right that the FSA shouldn’t take sole blame for the crisis, and nor should anybody else. As the Bank of England said, it was like Murder onthe Orient Express – everybody had a hand in it. We’re not a regulator – we’re a trade association – but I hope you can agree we have taken our share of the responsibility. As far back as October 2008, Angela Knight made the first public statement of regret on the industry’s behalf for its role in the crisis, and a number of bank chiefs have done so since. That’s not to say the banks were solely responsible for the crisis – rather that the industry recognises where it got it wrong and is currently trying to put it right. We try to explain this from the banking industry’s perspective, and we listen to ideas about how to make it better – hence Angela’s appearance on The Politics Show.

  • meg28scot
    blah, blah, blah it is all rhetoric to the public….. too little too late…

  • RabbitNexus
    Take note bankers that I do support this tax, but I have zero faith in you and believe the elites who dictate the over all game plan, desire nothing less than suffering and inequality on this planet. Your actions have always belied your pretty words.

    My personal belief is that you are the least worthy beings on this planet and that you and your kind, your entire “trade” of financial skullduggery and usury should be consigned to history, forever. I advocate your execution. I sincerely believe that the best move for mankind at this point regarding your kind, is to declare you enemies of mankind and to hunt you and exterminate you.

    This is my personal belief and I advocate it as a first step in restoring some balance in the world. I may sound crazy but many people agree with me. So I think you really should think seriously about your responsibilites at this time, consider how paying a fraction of a percent in taxes and introducing a little bit more of your complicated “book keeping” to your already self indulgent lives, might actually save your lives in the long run.

    Otherwise, our motto may end up being “Kill and eat the rich”

  • Thank you for your response. We appreciate it and are keen to keep talking.

  • bob334
    I invite any supporter of this tax to explain to me why what happened in Sweden in the 1980’s wont happen again.

  • davidhillman
    Hi Bob

    I posted this somewhere elso on the site yesterday in answer to your question but as the question also appears here, I am repeating it in case you havn’t seen it. Firstly, thanks for the question I think it’s very important to understand why the Swedish experience didn’t work whereas the UK taxing of stock transactions is a successful tax bringing in more than £3billion in revenue. It is especially important to understand this in the context that financial transaction taxes (FTTs) are commonplace throughout the world and have been introduced permanently or temporarily on such areas as stocks, corporate and government bonds, futures and general computerised financial transfers over the last 25 years in the following countries (and this isn’t a complete list): Argentina, Australia, Austria, Belgium, Brazil, Chile, China, Colombia, Denmark, Ecuador, Finland, France, Germany, Hong Kong, India, Indonesia, Italy, Japan, Malaysia, Morocco, Netherlands, Pakistan, Peru, Philippines, Portugal, Russia, Singapore, South Korea, Sweden, Switzerland, Taiwan, UK and US. So it is extremely important to contextualise Sweden’s short-lived unsuccessful experience, which is often rolled as some kind of proof that FTTs don’t work, when the vast majority of them are proven effective and successful means of raising substantial revenue.

    The best explanation I am aware of that gives a detailed comparison of the Swedish and UK experiences is from this paper by Sony Kapoor:

    Here I quote an extract which describes the UK and Swedish experiences in detail and compares and contrasts them excellently. I hope this will serve to fully answer your question.

    Kind regards


    I would just explain the acronyms Kapoor uses: STT = Security Transaction Tax and CTT = Currency Transaction Tax.


    Two examples of STT regimes

    The best point of reference would be to start at home and look at the STT regime in the UK. This is relevant, as London is one of the most important financial centres in the world; home to top investment companies, banks and other financial institutions.

    The UK has had a 0.5% (one of the highest in the world) tax on all share transactions in UK incorporated companies. It is chargeable whether the transaction takes place in the UK or overseas, and whether either party is resident in the UK or not. In 2000-2001, the tax raised £4.5 billion in revenue and had the lowest cost of collection of all major taxes (0.09% as opposed to an average collection cost over all major financial taxes of 1.11%). This shows that the STT regime in the UK is thriving and raises significant revenues (2000-2001 revenues were 14% of all corporation tax collected in the UK) at a time when some of the other major economies have dismantled their STT regimes.

    The Stamp Duty on shares in the UK was introduced in 1963 at a rate of 1% and in 1974 was revised upwards to 2%. It was reduced in 1984 to 1% and then again in 1986 to the current level of 0.5%. This level of 0.5% on the market value of a security is payable by the buyer. There is at present no tax on derivative securities but the transfer of a share to a nominee owner (to be re-issued as non taxable depository receipts) attracts a triple rate of 1.5%.

    Instead of focussing on both successful and unsuccessful examples of STT regimes, opponents of the CTT have chosen to talk just about the Swedish experience, which was a failure by most measures. In 1984, the Swedish government introduced a tax of 0.5% on both the sale and purchase of equities. This was payable only in the case of a Swedish Brokerage service being used. The tax went through many changes of rate but the basic structure remained the same. In 1989 a similar albeit smaller tax was imposed on the trade of fixed income securities, including government debt and associated derivatives, such as interest rate futures and options.

    As a result of these taxes, a significant amount of trading in Swedish stocks migrated overseas. At the extreme only 23% of the trading in Ericsson, Sweden’s most actively traded stock, took place in Sweden in 1989. The average for the market as a whole was 57%. There is little evidence of a fall in the overall size of the market; most trading just migrated overseas in order to evade the taxes imposed on Swedish brokers. In the fixed income markets the effects were even more dramatic; bond trading fell by 85% and bills trading fell by 20% within a week of the tax being introduced. This was accompanied by a sharp increase in trading in untaxed fixed income instruments such as debentures, variable rate notes, forward rate agreements and swaps all of which served as close substitutes for the taxed instruments.

    The Swedish STT experiment came to an end in 1991 when all the transaction taxes were abolished. The markets in both fixed income and equities soon recovered to pre tax levels.

    Can any lessons for the CTT be drawn from these STT regimes?

    The two STT regimes discussed above offer many policy lessons for the implementation of a CTT.

    The major difference between the Swedish and the UK STT regime was that the Swedish tax was a domestic tax on international capital whereas the UK tax is an international tax on domestically registered companies.

    The lesson here for successful implementation of the CTT in the UK is that the tax needs to be imposed on the trade of all British pounds, no matter where in the world they are traded and no matter how the counterparties trade. Because if HM Treasury only taxes currency trades in the UK, similarly to Sweden just taxing their domestic brokers to levy their STT, then it would be easy to legally evade through offshore migration. For a successful design of the CTT, therefore, the tax has to apply to the British pound itself, and not to a jurisdiction or a channel of trade. If it operates in this way it would be next to impossible to evade through any legal channels.

    The Swedish fixed income market saw a rapid migration of trades from taxed instruments to untaxed instruments that could act as close substitutes. This shows that it is important to cover all close substitute instruments when imposing a CTT. This being said, though equity derivatives in the UK are not taxed, the UK market has only seen a small migration of trades from the taxed share market to the untaxed derivative market. This shows that derivative instruments are not perfect substitutes for the underlying financial instrument. This is also partly as derivatives get less preferential treatment in the UK for accounting and reserve purposes.

    The next lesson can be drawn by looking at the fact that no mass migration of shares to depository receipts has been seen in the UK market. The purchase of shares for the purpose of issuing non-taxable depository receipts, the creation of non-taxable bearer instruments and for the purpose of transferring into clearing services is all taxed at 1.5%, three times the standard tax rate. This high initial cost of transfer and the fact that these instruments are not perfect substitutes for owned shares in the UK have both helped deter a mass flight from shares into these untaxed instruments. A currency equivalent of overseas depository receipts is the offshore holding of Eurocurrency deposits. This can be discouraged either through making offshore holding of currencies illegal (as Malaysia did in response to the South East Asian crisis) or by imposing a very high exit cost as in the case of UK shares.

    The original stamp duty in the UK was payable whenever there was a transfer of the paper share certificate from one owner to the other. However, when an electronic settlements system, called CREST, was introduced in 1996, a new tax called the stamp duty reserve tax (also simply called stamp duty in this text) was introduced on the electronic transfer of ownership. This made collection much easier and less expensive; only 0.02% cost of collection as compared to the 1.11% average for other major financial taxes. This shows that the recent trend of the FX market towards increased electronic trading and settlement (especially the Continuous Linked Settlement Bank) would make it much easier and cheaper for governments to administer and collect the CTT. Most of the FX is already traded electronically.

    Another relevant lesson that can be drawn from the UK stamp duty experience is that international co-operation on STTs is possible. As the stamp duty is payable no matter where shares in UK incorporated companies trade, there is a need for international co-operation which has been forthcoming. Another good example of international co-operation is that between the Irish and the British governments who share the stamp duty revenue collected on the trade of Irish shares in the UK.

    The UK stamp duty structure provides an excellent framework on which to develop a successful CTT regime. The fact is that the UK raises upwards of £4 billion in revenue every year through the stamp duty. As well, the London Stock Exchange remains the second largest exchange in the world despite having a stamp duty which is not payable in most competing exchanges. Both points are testament to the enduring success of the UK stamp duty regime.

  • Sheriff of Nottingham
    I agree with Bob334 (see the Wikipedia article on the Tobin Tax) – while this type of idea can appeal to a populist audience, it has a raft of follow-on consequences that wreaks havoc with an economy – it is a dangerous idea that ultimately will hurt every individual

  • Thanks @Sherriff (it’s been a while, how are things in the castle?) Just to quickly call you up on your assertion that this idea is appealing only to a ‘populist’ audience (heaven forbid a good idea should be popular). Either way, here are three links to pieces published in just the last week by people who can’t really be described as such and who disagree with you:

    Dani Rodrik, , Professor of Political Economy at Harvard University’s John F. Kennedy School of Government:… (the bulk of this article is a fascinating exploration of how orthodoxies can shift quickly and dramatically)

    Jeffrey Sachs, advisor to the UN Secretary General (with video):…

    The European Parliament votes 536/80 for a Robin Hood Tax:…

    Just one week! We may disagree but it just isn’t true to say this only appeals at a ‘populist’ level. Hope that’s useful. Stay merry

  • pierre c
    Enlighten us (or me, at least) -what happened in Sweden in the 1980s? And what does it have to do with the Robin Hood Tax?

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