Bill Gates is in favour and so is the Archbishop of Canterbury, and if were still alive today so would be St Paul. But what of our own (and still very much alive) Chancellor, George Osborne? Well his public position is that he is in favour, provided that it is applied globally, but is that what he really thinks? Well er um… no, according to the city of London and business newspaper City A.M.
Writing in last weeks Wednesday edition, Juliet Samuel revealed that the chancellor had serious doubts whether a Tobin tax was viable, even if it were applied globally. In a private letter sent to bank chiefs on Monday 31 October and seen by the paper, Osborne assures them that; ‘the necessary international consensus does not exist’ to imposes it. The article continues: ‘But he then goes further than his public stance: “Beyond this” he writes “I agree there would need to be further discussions about whether any FTT (financial transaction tax) model offers an efficient mechanism to raise revenue.” The private reassurances to bankers that he remains unconvinced about even a global Tobin tax using “any FTT model”, despite his public support for one, will relieve many in the City but could leave him vulnerable to charges of hypocrisy.’
Meanwhile I learnt at last Friday’s meeting of the TUC European Network held at Congress House, that at the end of September, the European Commission actually published a proposal for a directive introducing a FTT (or Tobin) tax. The report to us set out the details including objectives, scope (all financial transactions but not spot currency exchange) its legal basis and territorial application. The actual rate of tax was left blank, presumably because there will be scope for negotiations among member states, but various coalitions have campaigned for a uniform rate of 0.05%. The Commission is planning for the tax to come in on 1 January 2014 (quite quick by their standards!). A recent vote in the European parliament, which called on the G20 to conclude discussions on the basic components of a global financial transaction tax, was adopted by a large majority (594 in favour, 62 against, 3 abstentions). So there is a big cross-party majority in the parliament for the tax.
On 5 November, the Guardian’s Larry Elliott reported that Nicolas Sarkozy had pledged that the Eurozone will press ahead with work on the FTT tax after the Cannes summit endorsed the right of G20 countries to impose the levy. It appears that South Africa, Brazil and Argentina are now also in support, and he hoped to have it implemented at a European level by the end of 2012 (in advance of the proposed date in the draft directive). With the British government still in the opposition camp (with Sweden and the Czech Republic) and likely to veto it at EU level, it would be left to a ‘coalition of the willing’ in Europe to get on with it!
The adoption of the tax would be a great victory for NGOs, trade unions and millions of other world wide campaigners, but it’s no ‘magic bullet’. Banking pay and bonuses are back to unjustifiable levels while workers’ jobs, pay, pensions and conditions are continually being undermined, along with our social and public services, all to pay for the banking crisis we are not responsible for.