Sunday, 8 November 2009

Tobin Tax conversion by Brown?

At the G20 Summit, Gordon Brown has suggested a Tobin Tax (a tax on financial transactions) to pay for the global bank bailouts and deficits. This came as a massive shock not only to other global leaders, but to all those who have been campaigning for such a tax for several years.

At Prime Minister's questions less than a year ago, Alan Simpson MP suggested a Tobin Tax to "deter speculators from playing the terribly destructive role that they have played in throwing us into the current recession". Brown's response was that a Tobin Tax "has been found by many people who have looked at it not to be implementable".

Just a month before that another Campaign Group MP - Neil Gerrard - was dismissed by Treasury Minister Stephen Timms who said, "The Government have previously studied the technical implications of a proposed tax on sterling currency transactions and reached the view that there would be economic distortions across a range of activities beyond just the foreign exchange markets, the cost of which would be likely to far outweigh the relative costs of raising finance via other mechanisms that Governments use".

No one has yet explained Brown's Damascene conversion. Nevertheless, the severity of the UK's deficit caused the ongoing bank bailouts means that the time is exactly right to consider a tax that could raise billions from the finance sector. Surely logic hasn't reached Brown's thinking?

1 comment:

Andrew said...

Good article on this by War on Want's John Hilary in today's Comment is Free