Robin Hood tax will raise £26 BILLION to give back to the poor
LABOUR will impose a “Robin Hood” tax on stock market transactions and use the billions of pounds it would raise to repair lasting damage caused by the bankers’ crash nearly a decade ago, John McDonnell said at the weekend.
Up to £26 billion would be raised over the next parliament by applying a tiny tax on transactions that will also put a stop to the most dangerous short-term speculation.
The announcement comes after Labour vowed to renationalise key industries, such as rail, mail and energy, and to expand public services — policies outlined in a leaked draft of its manifesto.
The party said it would revise the 322-year-old stamp duty regime on share trading, closing a “loophole” exploited by banks and hedge funds, and extend the duty to cover financial “derivatives” and other highly traded assets.
At the current rate of 0.5 per cent per transaction, the policy would raise £4.7bn in 2016-17, rising to £5.6bn in 2021-22, the final year of the next parliament.
Around 10 European countries are currently preparing to introduce similar taxes.
At the same time, the party said it would target tax avoidance with “the biggest crackdown in this country’s history.”
The Panama Papers leak in 2015 gave an idea of the monumental scale of the practice, although those revelations were described as “just the tip of the iceberg.”
Labour pledged to close loopholes and clamp down on the network of secretive shell companies and offshore tax havens used by the super-rich to hide their wealth — many of which act as branches of the City of London.
Companies and wealthy individuals earning more than £1 million would be required to publicly file their tax returns, and a new HM Revenue and Customs tax enforcement unit would be set up, with the number of staff scrutinising these tax affairs doubled.
Mr McDonnell said: “The next Labour government will introduce a Robin Hood tax to make the financial sector pay its fair share after it received huge public bailouts in the 2008 crash.
“Ordinary people are still being made to pay by the Tories for a crisis they didn’t cause through the worst spending cuts for generations.
“All we’re asking for is fairness in our tax system. By making those who trade in financial derivatives pay a small fraction of their profits, we can help properly fund our public services.”
Tax-avoiders would also be banned from bidding for public-sector contracts, while there would be strict new minimum standards for Britain’s network of crown dependencies and overseas territories, a gigantic swamp of tax-dodging.
In addition, there would be a new levy on properties bought from offshore trusts located in tax havens.
And the party promised to close the so-called “Mayfair tax” loophole, which allows individuals to reduce their tax liabilities by treating interest as capital gains rather than income.
Bosses of defence giants and other firms with public-sector contracts could face multi-million-pound pay cuts under Labour’s plans to tackle “grotesque” inequality.
Mr McDonnell said that the salaries of bosses at companies winning taxpayer-funded contracts would be capped at 20 times the pay of the lowest earner in the same firm.