Mar 10, 2010 2:53:46 PM
By Geoff Meade, Press Association Europe editor in Brussels
Euro-MPs today called for an EU "Robin Hood tax" on rich banks to help fund development policies for the poor.
An overwhelming vote in favour of the move was welcomed by the TUC and Oxfam, but condemned by Tory MEP Kay Swinburne as giving tax-raising powers to Brussels.
A campaign for a global tax on banks' financial transactions was launched in London last month as a means of raising money to fight poverty, tackle climate change and boost public services - re-balancing the books after the economic damage wreaked by financial excesses.
The tax would be levied on every financial transaction between financial institutions - not those conducted by ordinary bank customers - and could raise billions to plough into social policies, including tackling climate change.
But an EU-level tax is not the right approach, insisted Wales MEP Ms Swinburne.
"The EU must not have tax raising powers," she said. "The financial services industry should play its part to ensure that the crisis never happens again. Some kind of levy on financial institutions could bare some merit."
She went on: "However, we must not implement an EU solution to a global problem. "To do so would further reduce competitiveness of the European economy, and raise the cost of capital to businesses.
"Any financial levy should be to stabilise the financial system, not to raise revenue for unrelated projects."
A resolution approved by 536-80 votes said a "Financial Transaction Tax" could be used for "innovative financing" for climate change or development projects. It backed a worldwide tax but asked the European Commission to look into how to implement such a tax at EU level if a global agreement cannot be reached.
TUC General Secretary Brendan Barber agreed, saying: "MEPs have backed Robin Hood. This is a very significant development which will be warmly welcomed by the unprecedented coalition of development, poverty, faith, environmental and union groups that have come together to promote the Robin Hood Tax.
"Spending cuts are not the only answer to the deficit. It's right that the banks and hedge funds who did so well from the boom years now make a proper contribution to clearing up the mess they have made."
He added: "Transaction taxes - or the Robin Hood Tax as we prefer to call them - can play a key role in making sure the right people pay for the crisis."
Elise Ford, head of Oxfam's EU office, said: "Today's vote is proof of broad support in Europe for a financial transaction tax to ease the social impact of the global economic crisis by making a significant contribution to preventing cuts in public services, tackling climate change and reducing global poverty.
"If MEPs can do this across the political spectrum, the European Council (EU
governments) should also be able to reach a common position on a financial transaction tax."
Belgium and Austria have already backed a special European tax, while the UK, France and German support such a financial tax at global level.
EU Taxation Commissioner Algirdas Semeta said the issue was best tackled at global level - the only way to prevent a flight of capital from the EU. And without a clear "distributive mechanism" for such a tax, the revenue generated could end up in the few countries with large financial centres.
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Tory opposition to the tax was attacked by Labour MEP Arlene McCarthy, vice-president of the European Parliament's Economic and Monetary Affairs Committee.
"The time has come for action to ensure the financial sector pays its way in the wake of the crisis. There is clear public backing for a tax on financial transactions and today's vote shows that in Europe we are committed to taking this momentum forward and looking at all options."
She went on: "The Tories, by voting against this, are isolated and out of touch. At home they talk tough on tackling banks' risky activities. Shadow Chancellor George Osborne claims to back global measures to raise more money from the financial sector, but yet again the Tories have failed to back the public's call for action."
