What is the controversial Robin Hood tax and how would it affect you?

Shadow Chancellor John McDonnell is leading the debate

Chancellor George Osborne is dead against it, but it seems his Labour counterpart wants us to have a “national debate” about the merits of the Robin Hood tax.

The Robin Hood tax, or to give it its proper name, the Financial Transactions tax, is a proposed levy on profits from financial deals in the EU.

The aim is to curtail City excesses by taking a proportion of profits and using the money to improve public services such as the NHS.

It’s popular with most other nations in Europe, however, thus far the UK has been the main opponent of the tax within the EU.

David Hillman, of the Robin Hood Tax campaign said the aim was “to have the banks and hedge funds pay for, or at least contribute to paying for, the immense economic damage their gambling, essentially it was gambling, had caused.”

Critics of the Robin Hood tax argue it would disproportionally affect the UK because of the number of deals carried out here.

McDonnell has long been in favour of the tax but said the Labour Party would not make a decision on policy until it had undergone a proper discussion.

In a BBC interview this morning McDonnell said: “Robin Hood tax at the moment is Labour Party policy on the basis of if we can introduce it globally, and that’s been Labour Party policy for some time now.

“However, what we are saying is today we are going to launch a review of our taxation system, we are going to bring the greatest economic minds in the world to bear on that issue, we are going to consult with the British people and then we will arrive at a decision on the way forward.”

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