The money

Why is it needed?

The Robin Hood Tax would not only protect these commitments, it would enable governments to go further.

It’s estimated that an additional US$36bn to US$45bn a year is needed just to meet the health-related Millennium Development Goals by 2015.  (Source: International Health Partnership)

And, following the failure of the negotiations in Copenhagen, large-scale new and additional financing is needed to fund adaptation and renewable energy projects worldwide. The UN estimates that developing countries require around $500bn annually to deal with climate change.

As the recession bites, aid and green budgets have been slashed. But the Robin Hood Tax can get progress back on track.

Why tax banks, hedge funds and financial institutions?

The financial sector has undergone runaway expansion in the last two decades. During that time, its activities have steadily become more divorced from the real economy of goods and services.

Globally it now turns over more than 60 times the size of world GDP every year. In the UK it has reached a staggering 446 times the size of our real economy. But risky trading practices played a major part in the financial crisis. (Schulmeister, 2009)

So it’s time for the people who caused this mess to pay to clean it up.

How will the money be spent?

The plan is for the US$400bn that could be generated by a global Robin Hood Tax to be split equally, with $200bn spent domestically and $200bn spent around the world.

Of the money spent globally, $100 billion would go towards international development and US$100 would support developing countries as they adapt to climate change.

The $200bn to be spent domestically would make serious inroads into tackling the structural factors that mean more than 13 million people in the UK live in poverty

The UK poverty-fighting charities who are supporting the Robin Hood tax have highlighted tackling child poverty, reforming the welfare system, investing in affordable housing and making homes more energy-efficient as the key issues to be tackled by the revenues from the Robin Hood Tax.

The $100bn for international development would help meet the funding shortfall for initiatives such as the Millennium Development Goals and the Global Fund to fight AIDS, Malaria and Aids, Tuberculosis and Malaria.

All stakeholders would take decisions jointly about collecting and allocating money, with the revenue spent according to developing countries’ own poverty reduction priorities – and according to the Paris Principles on Aid Effectiveness.

The $100bn for climate change would go a long way towards the $500bn needed annually to help developing countries adapt to and prepare for climate change.

Funds would be managed by a UN mechanism, to ensure they are allocated fairly and according to each country’s particular needs.

How does this relate to existing aid commitments?

For the Robin Hood Tax to have real benefit for developing countries, revenues raised would need to be donated in addition both to existing aid promises and to money already pledged to tackle climate change.

There’s more detail in our FAQ.