Yet again, the UK government has sided with the robotraders on a Robin Hood Tax

A financial transactions tax is the most economically efficient way to lessen the harm of HFT – but the government keeps fighting it.

Fifteen years ago the computer program Deep Blue made headlines around the world by beating chess giant Garry Kasparov. In the years since, computer algorithms have quietly gone on to dominate large parts of the financial markets.

Computer-driven trading now accounts for 70 per cent of trading in the US equity market, 36 per cent in the UK. Machines fire tens of thousands of trades a second, relying on state-of-the art technology and proximity to stock exchanges to shave microseconds off transaction times.

Yet tiny errors in the algorithms can have devastating consequences. During the infamous 'Flash Crash' of 2010 the Dow Jones index dropped nine per cent in a matter of minutes. Over the summer Knight Capital – a leading New York HFT (high frequency trading) firm – erroneously swamped the stock market with errant trades, wiping $440m from the firm's value.

That's why the European Parliament's powerful Economic Affairs Committee this week voted through legislation – the Markets in Financial Instruments Directive II – designed to curb HFT. A key proposal being that trades will have to be posted for at least 500 milliseconds (currently traders can execute 10,000 trades during the same period).

Proponents of HFT argue their churning sea of trades brings liquidity to the markets. The reality is more capricious - in times of crisis traders pull the plug, draining liquidity when it is needed most.

Adair Turner described such corners of financial markets as "socially useless". The Financial Times recently said “hard evidence and common sense point to a host of social benefits from removing unnecessary intermediation and curbing predatory trading strategies”, adding that in some areas Mifid II was simply too mild.

It's no surprise that high frequency traders themselves have mounted a defence against the reforms. What's of more concern is that in the days preceding the vote the UK Government lobbied for them to be watered-down. Its official response did not support the call for HFT firms to hold equities for a minimum period.

Yet as the Bureau for Investigative Journalism revealed last week, of a 31-member panel tasked by the UK Government to assess Mifid II, 22 members were from the financial services, 16 linked to the HFT industry. A study by the Bureau last year revealed that over half the funding for the Conservative Party came from the financial sector, 27 per cent coming from hedge funds, financiers and private equity firms. This perhaps helps explain how the interests of a select group of traders get confused with the interests of the economy as a whole.

It's a similar story for the Financial Transaction Tax. No longer a pipe dream, European Governments of all political hues, including its largest economies, are working towards its implementation by next year. The tax of between 0.1 - 0.01 per cent on financial transactions offers a more effective mechanism to limit market excesses by making certain speculative trades less profitable. But crucially, it is also capable of raising billions in much needed revenue that would ensure the financial sector pays it fair share for the damage caused to our economy.

Yet the UK Government has again chosen to stand apart in blocking a Europe wide-FTT, turning down billions in desperately needed revenue that could help save jobs, protect the poorest and avoid the worst in cuts to public services. Instead, advice of previous Party Treasurers Michael Spencer and Peter Cruddas was heeded, who infamously lobbied against the FTT. Both incidentally own multi-million pound financial firms which would be hit by such a tax.

Taken together, this tells the story of a post-financial crisis Europe: as governments embark on the arduous task of making markets once again work in the interests of society, the UK Government remains intoxicated by the Square Mile - protecting vested interests and relying on the same market principles that got us into this mess to get us out again. Best brace ourselves for a bumpy ride.

The EU Parliament. Photograph: Getty Images

Simon Chouffot is a spokesperson for the Robin Hood Tax campaign and writes on the role of the financial sector in our society.

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Female genital mutilation is not just a women’s issue, it’s a human issue

A new play explores how two women react when their daughters' friend is subjected to FGM.

Alice Denny was born into a body that didn’t feel like hers. There is no one ‘right’ way to live and no one should have to hide who they really are.  For years, she accepted the guise before eventually making the transition she deserved.

“A life and body to finally match my mind,” she says softly, quoting one of her own poems to me. “I know, it’s silly,” she adds in a fluster, but Alice needn’t be so modest. In fact, she should be very proud.

We’re at The Joker, an offbeat bar in Brighton, and Alice explains how the realisation of her womanhood inspired her to take up a leading role in CUT, a community play highlighting the horrors of female genital mutilation (FGM), which premieres in Brighton next week.

“For anything to stop women from being women, I find so upsetting,” Alice tells me with a communicable heartbreak in her voice.

FGM involves the removal of a woman’s clitoris, inner-and-outer lips of the vagina, and the sewing or stapling together of the two sides of the vulva leaving only a small hole to pass urine and menstruate – depending on the variation. Typically, FGM is carried out with a razor blade on girls between the ages of four and 15, often without any anaesthetic.

This misguided practice, fed by some faux-rationale about raising girls properly, is most common among cultural and religious groups in Africa and the Middle East with the World Health Organisation estimating around 125 million cases across the globe. Many of these communities believe FGM will serve to limit a woman’s libido, discourage sexual promiscuity and strengthen the institute of marriage.

“It’s brutal and makes me almost ashamed to be a human being,” Alice states emphatically.

Of course, to take solace in the fact FGM is not as common in Britain, where it is illegal, is to cataclysmically miss the point. It shouldn’t happen anywhere or to anyone. As it is, an approximate 137,000 women in Britain are affected by FGM, but even that number could be more given the ‘hidden’ nature of the crime.

Daughters of some first-generation immigrants and asylum seekers can be at a particular risk, with these girls taken to their countries of origin against their will during the school holidays for the procedure, allowing them time to ‘heal’ before their return. In reality, the lasting effects both physical and psychological never cease completely.

It is a terrifying thought and one that the incisive CUT, written by Suchitra Chatterjee and Susi Mawell-Stewart, explores. The play chronicles the lives of two women, Brona and Kiva, neighbours forced to face up to the problem of FGM on their doorstep when a shared African friend of their daughters is about to be sent away to be mutilated. Parent of two Alice stars as Brona, while Norma Dixit portrays Kiva. 

So what does CUT hope to achieve?  “It’s about trying to break the conspiracy of silence surrounding this issue,” an impassioned Alice reveals.

The former psychiatric nurse continues: “FGM isn’t something that’s isolated to one place or one group of people. It’s a wider feminist issue, a human issue, which needs to be addressed collectively. The play is about raising awareness, a vehicle to say to women to make the world a better place for each other.

“Women matter, never mind culture, never mind traditions of people being subjugated. We matter and we can make our lives what we want them to be. I’ve made my life what I want it to be and I feel so happy about that.

“People who say ‘it’s nothing to do with us,’ of course it is. It’s brutalizing women. I would love people to say, ‘actually I do know something that’s going on and I will go to the police and they will listen to me.’ I want people to be energized and make it their business.”

Admittedly, CUT, directed by Rikki Tarascas, is not for the faint hearted and will no doubt leave the audience shocked in their seats. Then again, that’s the idea.

CUT will premiere at the BrightHelm Community Centre in Brighton on May 10 and features a pre-show event with speeches from, among others, Khadijah Kamara, an FGM survivor and Heather Knott, a former Soroptomist International UK committee member.