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TUC calls for 0.05% transaction tax on banks

The TUC is calling for the Government to introduce a tax on UK banks to help repair the damage done to public finances by the credit crunch. 

The TUC says a 0.05 per cent transaction charge (Tobin tax) on instant transfers between UK financial institutions would raise £30bn a year. 

It is proposing a transaction tax on the money that goes through the Clearing House Automated Payments System (CHAPS).

This system is used by large banks to make same day, irrevocable payments. These transactions, which reached £74tr last year are dominated by the trading activity of large financial institutions.

The TUC says that the main purpose of the tax is to raise money to repair the public finances and therefore need not be permanent. However it says if it is found to have a useful dampening effect on speculation, then it could be made permanent.

General Secretary Brendan Barber says: ‘When the time is right to begin to deal with the deficit, those who caused the crash should pay their share.”

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