The Labour Party says it will "undertake the biggest crackdown on tax avoidance in this country's history, and introduce a 'Robin Hood Tax' on financial transactions as part of its plan to build a Britain for the many, not the few".
Labour says its plans will create a fairer tax system and raise billions in extra government revenue to fund Labour's plans to invest in our public services after years of Conservative cuts.
At the same time, Labour says they will help to bring long-term stability to the banking sector by eliminating the most disruptive forms of speculation.
Robin Hood Tax
The Labour Party says that expert analysis shows that £4.7bn can be raised as of now through a Robin Hood Tax, by modernising the 322-year old stamp duty regime on share trading. Labour will, it says, update the tax regime to close down an existing loophole for banks and hedge funds (costing the Treasury £1bn a year) and incorporate new forms of highly-traded financial assets, including financial derivatives like options on shares.
Extending the current tax of 0.5 per cent per transaction will deliver as much as £26bn over the course of the next parliament, financing Labour's ambitious plans for public services. The move will eliminate the most destabilising forms of speculative high-frequency trading, and mirrors the financial transactions tax currently being prepared for introduction by 10 other European states.
Campaigners have long called for the 'Robin Hood Tax' on financial transactions to put some of the immense wealth generated from financial speculation into public service, and begin to address the huge wealth inequalities that speculation generates.
Crackdown on tax dodging
Labour will take on the tax dodgers and bust open the secretive networks of avoidance that deprive our public services of billions.
As last year's Panama Papers revelations showed, avoidance is an exclusive club for the global super-rich that working people and small businesses don't have access to. A dense network of shell companies, secret bank accounts, and governments too happy to look the other way have enabled vast wealth to hoard offshore.
Cautious estimates by the OECD suggest that £65-120bn of corporation tax is avoided by multinationals globally every year, whilst an astonishing £13tr is estimated to be hidden in offshore tax havens.
HMRC admit that the 'tax gap' in the UK runs to £36bn every year, but tax experts think the true figure could be far higher. And every single penny illegitimately hidden away from the fair taxes due in this country is a penny taken from our schools, our hospitals and our public services.
Based on expert advice from economists, tax collectors and tax lawyers, Labour has prepared a comprehensive programme of tax reform that will clamp down on the social scourge of tax avoidance, freeing up billions for our public services.
The Conservatives won't do it because they are the party of the tax dodging elite. The Panama Papers revealed a score of top Tories tied into secretive offshore networks.
Labour will close the loopholes, clamp down on the tax havens, and shine a light on the illicit activities of those super-rich seeking to duck their responsibilities to the rest of society. We will put the wealth they try to hide into public service and build an economy for the many, not the few.
Speaking today, Labour's Shadow Chancellor of the Exchequer, John McDonnell, said:
"The next Labour Government will introduce a "Robin Hood Tax" to make the financial sector pay its fair share after it received huge public bailouts in the crash. Ordinary people are still being made to pay by the Tories for a crisis they didn't cause through the worst spending cuts for generations.
"All we're asking for is fairness in our tax system. By making those who trade in financial derivatives pay a small fraction of their profits, we can help properly fund our public services. Instead of Conservative tax breaks for the super-rich, we'll put more money in people's pockets, protect 95 per cent of people from any rises in income tax, National Insurance and VAT, and build a Britain for the many, not the few."