On 26th June 2012, the BMA voted in favour of the Robin Hood Tax after successful campaigning by EG4Health member Khalil Secker. The tax proposes a 0.05% levy on all inter-bank transactions, to generate revenue of £20 billion annually which can be focused at three priorities: 1) public services in the UK; 2) aid for developing countries; and 3) combating climate change.

The BMA is the official trade union of doctors in the UK. Throughout its 175-year history, it has focused predominantly on defending the interests of doctors. In recent years, it has become increasingly active in defending the interests of patients, for example by opposing the government’s reform of the NHS. However, never before has this relatively conservative organization taken another step back and spoken out against the government’s general macroeconomic policies, its tax policy, or whether it is doing enough about global health and development. The fact that BMA is now beginning to speak out on such matters is true testament to the positively changing role of the BMA, as well as the strength of the Robin Hood Tax proposal.

Across the EU, more and more countries have expressed explicit support for an EU-wide Robin Hood Tax, including all the big economies (France, Germany, Spain and Italy). France has gone so far as to adopt the tax unilaterally in order to increase momentum to the proposal. The European Parliament continues to work on the policy in order to canvass wider support of the few outlying countries such as the UK.

An increasingly wide range of groups all across UK society now support the Robin Hood Tax, with the notable exception of the banking elite (due to self-interest), and the political elite. The banking elite has borne a disproportionately light share of the economic burden since 2008, when compared to the general public,. This makes the UK political elite look increasingly out-of-touch with the general public, as the government’s policies appear to serve the interest of only a fraction of society. This is fractally similar to the wider problems of economic governance at the global level, with the IMF looking increasingly as though it serves the interest of a minority group of the international banking elite, as opposed to promoting the economic well-being of the world at large [1, 2, 3].

Looking ahead, advocates of health and sustainable development must continue to mount pressure on the UK government to break its statist-dogma that belongs to the 20th century, and to accept the 21st century reality of an interconnected economy with interconnected outcomes. Supporting an EU-wide tax on financial transactions will have immediate benefits for all European citizens, as well as indirect security and migration benefits by alleviating much of the trouble in remote parts of the world. After passing an EU-wide RHT, we can work toward inspiring other countries to adopt similar norms and values about the benefits of working toward the global good, which would in turn strengthen global solidarity on global economic issues. The pinnacle of such a transition would be fundamental reform of the IMF itself, so its activities can once again serve the interests of the common good for which it was originally intended.

Taavi Tillmann

¹ Stuckler, D., S. Basu, M. Suhrcke, A. Coutts, M. McKee 2011. Effects of the 2008 financial crisis on health: a first look at European data. The Lancet v378(9876): 124-5. http://people.ds.cam.ac.uk/ds450/details/financemortality.pdf

² Stuckler, D, S. Basu, and M. McKee. International Monetary Fund and aid displacement. International Journal of Health Services. v41(1): 67-76. http://people.ds.cam.ac.uk/ds450/details/stuckler%2041_1.pdf

³ Stuckler D, King LP, Basu S. International Monetary Fund Programs and Tuberculosis Outcomes in Post-Communist Countries. PLOS Medicine 2008 http://www.plosmedicine.org/article/info%3Adoi%2F10.1371%2Fjournal.pmed.0050143

Seventy organisations have written to David Cameron calling on him to back a Robin Hood Tax on financial transactions at today’s G20 summit in Cannes as a new poll reveals strong public support for the move.

Coming just a day after the Archbishop of Canterbury called for a Robin Hood Tax, the letter is signed by a range of domestic, international, faith and environmental organisations from Barnado’s to the Methodist Church and from Oxfam to the TUC. It warns that despite public statements from ministers in favour of a global financial transactions tax, in private the UK may be preventing progress.

It argues that a Robin Hood Tax “would be the most popular tax in history” and states: “Your government has said that you are not opposed to an international financial transactions tax… But we fear that instead the UK Government is acting to block debate. This is despite the fact that the UK has one of the largest transaction taxes in the world, the stamp duty on shares, and is a world leader in showing how to design and implement such taxes without global agreement.”

These organisations represent millions of people and their support for a FTT stands in stark contrast to the British Bankers’ Association and a small number of other organisations who recently wrote to Osborne to criticise the Financial Transaction tax.

The letter comes as a new poll reveals that the British public are in favour of a Robin Hood Tax to raise money to tackle poverty and climate change by a margin of two-to-one.

The poll of 1,001 people by Ipsos Mori for the Robin Hood Tax campaign shows that almost half the British public (48 per cent) support or strongly support the tax and that just under a quarter (23%) oppose or strongly oppose it.

In recent days, almost 80,000 people have contacted David Cameron and Chancellor George Osborne to press them to back a Robin Hood Tax. Campaign group Avaaz’s action in support of a Robin Hood Tax caused so many people to ring the Treasury their phone system collapsed on 13 October.

Public anger that the banks have not been asked to pay their fair share for the economic crisis they helped to cause is also shown by the Occupy London Stock Exchange protests outside St Paul’s and by similar camps around the world.

David Hillman, Robin Hood Tax campaign spokesman, said: “The message from the public to David Cameron is clear: start putting the interests of ordinary people ahead of the vested interests of the City.

“This is a rare, historic opportunity to make finance work for people rather than the other way around. Yet rather than lead the world, David Cameron’s government is lurking on the sidelines.”

More than 1,000 parliamentarians from 30 countries, have signed a declaration in support of a Financial Transaction Tax. The declaration says: “In the light of the recent economic crisis caused by the financial sector and the immense costs to citizens in both the developed and developing world, it is time for the sector responsible to make a far greater contribution to help safeguard livelihoods and save lives.”

The European Commission released its long-term budget strategy today (press release here). Excitingly, it includes a suggestion to finance the EU’s activities through an EU Financial Transaction Tax.

Mr. Tobin first suggested the idea of taxing financial transactions, and the Robin Hood Tax coalition has been campaigning for it for two years. A public consultation on the issue illustrated strong polarization of opinion, with the financial industry strongly opposing the tax, while the general public strongly supported it. The first great victory came in March 2011 when the European Parliament approved the idea. Subsequent widespread campaigning, including a Global Day of Action, were important in securing this second important step. Not only does the tax have the support of the institutions, it also has the public support of notable European leaders, including President Barroso, Taxation Commissioner ŠSemeta, and Budget Commissioner Lewandowski. This story illustrates how well-organized civil society initiatives will always triumph over the vested interestes of privileged individuals, thus adding confidence to the EG4H agenda.

The Financial Transactions Tax has the potential to hugely benefit international development and global health, by supplying up to 100 Billion USD of additional aid every year. However, a number of things need to be done for this to be achieved, namely:

1. The EU has, to date, suggested that the revenue of the tax will be spent mainly in Europe. Civil society has to put pressure on the EU to spend only 50% of this extra money at home, leaving 25% to be spent on international development and 25% on climate change.

2. The EU Commission suggests that the tax will become law only in 2018. There is little reason for this delay, and there is the threat that the next commission in 2018 will scrap the idea. Civil society has to put pressure on the EU to impose the tax quicker.

Once an EU-wide FTT has been created, we can look forward to a G20-wide FTT. The EU heads of state will discuss the EC tax proposal on 17-18th October, ahead of the G20 summit in November. Advocacy and campaigning will be critical in pushing the swing of the pendulum in the right direction. For example, Britain is surprisingly reluctant to support the tax, which is why we need more letter writing like this to get UK MPs behind it. Watch this space on how you can get involved, either at the national, EU and G20 level.

Taavi Tillmann

Two economists at the influential and respected Institute of Development Studies have just published a systematic review of  the evidence for and against financial transaction taxes (FTTs). They find “no reason to believe” that a FTT would be “significantly worse than most alternatives, nor that it would be any more difficult to collect”. Read more…

The Guardian on-line is running a poll on the need for IMF voting reform. It is well worth voting – but it misses the point. Besides confusing the process for selecting the Managing Director (on which the US takes a back seat, leaving the choice to the European governments) with the weighted voting system, the only alternative it presents to the status quo is reform to “reflect the shift in global economic power towards emerging markets”.

As the Commission on Social Determinants of Health said,

“It is only through such a system of global governance, placing fairness in health at the heart of the development agenda and genuine equality of influence at the heart of its decision-making, that coherent attention to global health equity is possible.” Read more…

Over the past 18 months, Economic Governance for Health (EG4H) has continued to spread the message on the importance of global economic reform for health outcomes – and campaigned widely on issues including tax reform, and improved accountability for international institutions. 2011 is proving to be a very big year for economic governance and health; we’re reviving the EG4H newsletter to help you stay abreast of developments in this fast-changing field.

In this newsletter from EG4H…

• Call for EG4H ‘Outreachers’
• News round-up: details on the relentless progress of Robin Hood Tax campaign; interesting changes at the IMF and World Bank; and WHO’s consultation on social determinants of health
• Just out: links to some important recent writing on global economic governance and health
• A brief update on student branch activities
• How you can get involved Read more…

Important news from the UK, where a group of MPs has recently submitted a parliamentary motion arguing for reduced income inequality. The key passage from the Early Day Motion (EDM) is here:

“That this House notes the findings of the Equality Trust that societies with smaller income differences between rich and poor have fewer health and social problems, such as teenage births, violence, mental illness and drug abuse; further notes that such societies have higher levels of trust between citizens and more social mobility; and therefore encourages the Government to promote policies that reduce income inequality.” Read more…

Protesters in Tahrir Square in February this year

Hot on the heels of last month’s blog about a confidence crisis at the IMF, this month we bring you news of shaky knees at its sister institution, the World Bank, which – amid the cacophony of views about what exactly has triggered the revolutions of the “Arab Spring” – seems to be preparing to re-cast its role in the region.

The spreading IFI confidence crisis

Evidence comes from discussions at a conference sponsored by the World Bank in Washington last month, addressing the organisation’s policy in the Middle East following recent upheavals in the region. In his opening remarks to the conference, the World Bank’s president, Robert Zoellick, described his organisation’s record in the region as “spotty”, and admitted that “like others, we…have much to learn”.[1] Read more…

A headache for IMF chief, Dominique Strauss-Kahn

An article in The Guardian newspaper in January created a minor storm by highlighting an apparently extraordinary finding from a recent study by public health researchers in the UK and US: that countries receiving loans from the IMF spend just one cent in every dollar received in health aid on actually improving medical care for their populations.[1]

The response from the IMF has been predictably robust.[2] But elsewhere there are signs that a significant re-orientation of IMF policy is taking place, prompted by criticisms levelled against it in recent years, and a period of introspection on the organisation’s role in the financial crisis.

How are we to make sense of all this?

Read more…

The European Parliament building in Brussels

Big news from the Robin Hood Tax campaign, which regularly visitors will know EG4H has been supporting for some time now. On Tuesday this week, MEPs in the European Parliament voted in favour of levying a Financial Transaction Tax (FTT) on banks across the European Union. The proposed tax would be levied at 0.05% on all financial transactions, raising around €200bn a year. Within the European Union, it is being driven by the French and German governments, and has strong support from Austria and Spain.[1]

Although the vote is non-binding, three things make this development particularly significant.

Read more…