After writing back in September (see here) at my disappointment that Labour had failed to support Adair Turner’s call for a Tobin tax, I was delighted to see Gordon Brown endorse the idea at this weekend’s G20 summit in St. Andrews.

The UK Prime Minister called for “a better economic and social contract between financial institutions and the public based on trust and a just distribution of risks and rewards”. His comments were seen as an endorsement of the so-called Tobin tax. The words show a welcome move back onto the progressive left political landscape for New Labour.

The endorsement follows the earlier support from the German Social Democrat Party for the idea of a Tobin tax, as well as support from France.

As stated in earlier posts the tax would work to curb financial excess through providing finance for stronger regulatory institutions.

It could also raise substantial funds, up to $100 billion dollars a year in the US alone (at a stamp tax of 0.5, the same as the stamp tax imposed on UK stock trades) slashing world deficits caused in the credit crunch.

A Tobin tax would further provide social goods, such as  poverty relief and helping developing countries mitigate and adapt to climate change, as Gordon Brown proposed – a potential stream of funding currently needed in crucial discussions at Copenhagen and beyond on climate change.

Although the idea has received a frosty response from the US Obama administration, as well as Canada and the IMF, as UK Chancellor Alistair Darling stated (a previous bogey man for his lack of support) this does not mean an end to the plans.

As I have earlier stated, the Millennium Development Goals including debt relief were once seen as idealism, before concerted pressure from European leaders including Mr. Brown made them a reality (eventually even receiving US endorsement).

Arguably a Tobin tax has stronger economic arguments for its implementation than debt relief did and if Europe can again take a lead, the Tobin tax has a chance of becoming a reality, although one most likely based in the mid-term rather than the short-term.

I therefore hold my hands up and say credit is due where credit is due and take my hat off to Gordon Brown and Alistair Darling for supporting this worthwhile initiative. Let’s hope that this growing wave of support can help the Tobin tax to deliver credit where it is most due: to the most disadvantaged in the world.