Financial reform campaigners have called for a £20 billion tax levy on the financial services industry, after a report by the Robin Hood Tax Campaign found that contributions to the Treasury are dwarfed by the increase in Government debt caused by the crisis.

The report ‘There is an Alternative’ estimates that it will take nearly 20 years to recover the costs of the banking crisis, and has demanded that the Banks take on more responsibility for repaying the debt

It referred to figures from the International Monetary Fund (IMF) that put the cost of Government debt at £737 billion as compared with the £203 billion it received in tax from the financial sector from 2002-2007.

Spokesman for the Robin Hood Tax Campaign, Max Lawson, said “The contribution banks make in boom years is dwarfed by the cost they impose on us all when things go wrong. It is time our politicians brought big banks to heel and made them pay their fair share. Even the IMF says the financial sector is under-taxed.”

Further adding that “The public should not pay the price of the reckless profiteering that was allowed to pass for productive activity in the trading rooms of the City”

The proposed £20 billion tax levy is a far cry from the current £2.5 billion levy on the banks’ profits that is currently in force.  The Robin Hood Tax Campaign, which launched in early 2010, wants the banks to help fight poverty in the United Kingdom and abroad and take responsibility for the mess they caused in the lead-up to an in the wake of the banking crash.

It also thinks that the banks’ warnings of a moving overseas if they are treated harshly is an empty threat, and UK politicians should call their bluff.

A proposed financial transactions tax is on the agenda of a meeting of European finance ministers later this month. Nicolas Sarkozy, the French president, and German chancellor Angela Merkel are both in favour, but will face of opposition from the US and UK.