Currency Transaction Levy

Leading economists and politicians say a micro-tax on foreign currency transactions is an idea whose time has come. The idea was the brainchild of the late Professor James Tobin, an American Nobel prize-winning economist.

In 1972, Tobin argued that a small tax on each foreign exchange transaction was a good way to curb speculators destabilising fragile economies. Speculators regularly manipulate weak currencies in developing countries, creating economic crises with devastating social consequences for innocent people.

The Tobin Tax, as it became known, had a small band of dedicated supporters. But it was not embraced by the financial establishment.

Then, nearly 40 years later, the financial crisis caused world institutions to cast around for innovative solutions to reform the global economy.

Tireless work by a small number of campaigners – principally, the Stamp Out Poverty coalition – prompted two world institutions, the United Nations and the Leading Group of Nations, to support what became known as the Currency Transaction Levy (CTL).

Momentum increased in November 2009 after Gordon Brown joined France and Brazil in backing a tax on financial transactions at a high-profile international event In February 2010, an alliance of some of the world’s biggest campaign groups rebranded the CTL as the Robin Hood Tax: a move which ramped up public awareness and support.

But despite the growing momentum, there is no guarantee that the Robin Hood Tax will be adopted. There still needs to be a strong campaigning message, loudly voiced by as many people as possible.

World leaders must force banks to pay for the mess they have created. The Robin Hood Tax is an elegant way to fight poverty in the UK and abroad as the global economy remains perilously fragile. Society needs that money more than ever.