The Tobin Tax

There are reports in the news that the EU wants to introduce a so called 'Tobin Tax', named after the economist who originally proposed it.  Some also label it the Robin Hood tax in that in theory it takes from the rich and gives to the poor.

Sweden tried a version of this in 1984 but dropped it in 1991 as a disasterous experiment.  It reduced share prices when implemented and decimated trading.  After it's abolition, the trading market recovered.

So why do the EU want to implement it now?  Simple, seventy percent of the financial services transactions in Europe take place in London which would therefore bear the brunt of the tax.  The proposal comes not from the UK but from Germany and France.  It would have far less effect in their countries and rather than going to help the poor and needy as the Robin Hood name would suggest the monies will go into a EU fund to support the Euro (of which the UK is not a part).

If the tax is not implemented across all the major world markets, traders will move to the markets which are not taxed.  This would mean a massive exodus from London to other centres such as Hong Kong and New York.  The major financial institutions are already global so it would be relatively painless for them to move, indeed I believe HSBC had already threatened to do so before the tax was proposed in the EU.

This country is not in the Euro, at present would not stand to benefit from being so, and is not responsible for the financial struggles of those that are.  We have already bailed out Euro Zone countries with money we don't have and it is time we vetoed any further attacks on UK finances.