U.K.'s Labour to Impose Stamp Duty on Bonds and Derivativesby
Financial institutions would lose exemption, pay lower rate
Party estimates the move would more than double revenue
Britain’s Labour Party pledged to more than double what the government raises from taxes on financial transactions by extending stamp duty to cover derivatives and bonds, and removing an exemption for trading houses.
The “Robin Hood Tax” would raise an extra 4.7 billion pounds ($6.1 billion) a year, while eliminating “the most destabilizing forms” of high-frequency trading, the opposition party said in a statement. Last year, stamp duty on share transactions raised 3.3 billion pounds.
Financial firms would be charged the tax at 0.2 percent on each transaction, while everyone else would pay 0.5 percent, the rate currently charged on stocks. Labour’s estimates assume that the tax would cut the volume of high-frequency trading, it said.
“All we’re asking for is fairness in our tax system,” said the party’s Treasury spokesman, John McDonnell, in the statement. “By making those who trade in financial derivatives pay a small fraction of their profits, we can help properly fund our public services.”
While Labour is forecast to lose seats at the June 8 election, Theresa May’s governing Conservative Party has shown itself willing to adopt popular measures to tackle perceived unfairness in the relationship between people and business. The Conservatives this month pledged to cap household energy prices, accusing the country’s largest suppliers of “unfair” pricing.