Vir Cantium

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Tag Archives: robin hood tax

On The Conservatives’ Bank Levy

Someone less loyal to the Conservative leadership might have wept yesterday morning when they heard that the party was now supporting a bank levy regardless of whether other major economies introduced it.

They might have scratched their head and wondered why it mattered so much that some other countries – the USA most notably, for example – were now going to introduce such a measure that we had to declare that we would do it unilaterally. The justification for the change in tack seemed to immediately negate the change from multilateral to unilateral introduction of the levy.

They might have watched the Andrew Marr show this morning and sympathised with Phillip Hammond, who only weeks ago was following the more sensible line that any such tax would only be workable if everyone did it. They would have seen Hammond having to perform logical contortions to try to fit in with this weekend’s policy.

Someone so less loyal to David Cameron and George Osborne might have gulped as they realised that, on this issue at least, the current disaster of a Labour chancellor was actually demonstrating more economic literacy then his own party’s leader and shadow chancellor when he stuck to the multilateral line.

They might also have baulked at the citing of Margaret Thatcher’s legacy, and then rolled their eyes at the mention of President Obama, reflecting that just because an increasingly unpopular left-wing administration in another country seems bent on destroying the competitiveness of their financial sector, doesn’t make it OK for a future Conservative government to do so here.

Finally, that disappointed Conservative member might be reflecting that whereas a true Conservative would see an international move towards a bank levy / Tobin Tax / Robin Hood Tax as an opportunity to boost the City of London’s competitiveness by not imposing the levy, a socialist would see also see it as an opportunity – to introduce a new tax, something that is in their, not the Conservative, DNA (to borrow a Cameron phrase).

Me? Oh, I was just annoyed at the current fad of having David Cameron speaking to a backdrop of fidgeting, gurning (but carefully selected) party members which distracted from what he was saying to such an extent that I had to watch it all over again. (I had an invitation to attend that very event, but thought I would spare the nation the horror of looking at me over their elevenses). Surely Cameron could have made the speech in a traditional news conference setting, without corralling all those party members – candidates among them – who should have spent the Saturday morning campaigning?

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When Luvvies Try To Do Economics

I like Bill Nighy … as an actor. He’s good. But he should stick to acting.

The same goes for Richard Curtis: a fine writer there is little doubt, but he should stick to writing. Nevertheless, they and their chums have embarked on a crusade. A campaign to introduce a Tobin Tax.

The Robin Hood Tax is a tiny tax on bankers that would raise billions to tackle poverty and climate change, at home and abroad.
By taking an average of 0.05% from speculative banking transactions, hundreds of billions of pounds would be raised every year.

Gosh, it really is the silver bullet! The panacea!

Yesterday, the Robin Hood Tax had plenty of favourable airtime, particularly on the BBC. It’s difficult to reconcile, I know: a campaign driven by leading members of the world of entertainment, supporting an idea that involves increasing taxation and the tentacles of the state, getting a warm welcome from the major (and state-supported) player in UK media.

But wait, it’s not just luvvies involved here:

Who’s in?

Gordon Brown, Angela Merkel (the German Chancellor) and Nicolas Sarkozy (the French President) have all spoken out in support of a tax on financial transactions.

No mention of support from the great President Obama. Funny that.

Anyway, Gordon Brown supports it. So it’s dead in the water then.

Speaking on the PM programme last night, dear old Bill’s support seemed to hang on the “fact” that Richard Curtis is a very intelligent man, so he must be right. But isn’t a Tobin Tax unworkable without every country signing up? Oh no, even if the UK alone were to do it, it would raise x billion which could then be used to fight child poverty.

Now I’ve left out the amount because (a) the thing would still be unworkable, so it hardly matters, and (b) the loss to the Exchequer would be “x” times a significant multiple as the institutions leave London and take their corporation tax, PAYE, employers and employee’s National insurance and stamp duties with them. Then there’s the cost to ordinary pension funds from this “tiny tax on bankers” (and yes, the equivalent effects on Frankfurt or Tokyo should the grand global plan come together). Oh, wait …

Will the tax be passed on to consumers?
The Robin Hood Tax will not impact on personal banking or on retail banking. That’s because it targets a distinct area of bank operations – high-frequency large-volume trading, undertaken by financial institutions in the ‘casino economy’. 

If you change money to go on holiday, send remittances abroad, invest in a pension fund or take out a mortgage, you will not be affected by this tiny tax.

Really? Well, I guess this would explain why Curtis, Nighy et al weren’t complaining too loudly when so many were enjoying low interest rates and free banking, partly made possible by the “socially useless” but profitable activities of the banks – they’re using fantasy economics. Next year they’ll be campaigning to have more money trees planted.

Underpinning the plan is the touchingly quaint and naïve assumption that throwing billions of public money at a problem will solve it … like child poverty. Note to Bill: this isn’t 1997 any more. Billions have been thrown at child poverty, and things haven’t got any better. Sometimes, you know, it’s not just about money. And even when it is, it’s not always about governments spending it.

One last point for now: if the Sally Army, Oxfam, ‘, Christian Aid, RSPB, Save the Children, Comic Relief and many others were hoping to get any money / unwanted clothing / bric-a-brac off me in future, then they will have to become proper charities again … not campaign fronts for statist left-wing causes.