Why Osborne is wrong on the Robin Hood Tax

The Chancellor has framed the debate as an EU attack on British prosperity. This does not stand-up.

George Osborne ripped back his well maintained veneer of ambivalence towards the Robin Hood Tax this week, revealing his true identity as the protector of the privileged few in City.

Having been given the advice of the IMF, Bill Gates and the European Commission who have all shown Financial Transaction Taxes (FTTs) are feasible, Osborne chose to ignore them, declaring instead it would be "economic suicide". But while his attempt to frame the debate as an EU attack on British prosperity may have superficial appeal -- John Major has made a similar attack today, claiming in the Guardian that an FTT would fan the flames of Euroscepticism -- it does not stand-up to economic scrutiny.

Let's start with the growth argument. Earlier this year, Osborne increased VAT (the transactions tax we all pay in the real economy) by 2.5 per cent to 20 per cent. VAT increases push up prices and are certainly not good for growth and they hit the poorest twice as hard as the rich. Yet now Osborne is casting a 0.05 per cent tax on the financial transactions of investment banks and hedge funds as bad for growth. The irony is of course, that as the IMF pointed out, financial transactions are VAT exempt.

The fact that a Robin Hood Tax would raise billions to protect jobs, services and the poorest was handily ignored. So too was the fact it would rein in rogue elements of the financial sector responsible for a crisis that will, according to the Bank of England, ultimately cost the UK at least £1.8 trillion and as much as £7.4 trillion in lost GDP. The biggest threat to our long term growth is surely an unrestrained financial sector and not a 0.05 per cent tax on their transactions. Any job losses are likely to occur in the exclusive corners of the investment banks a million miles away from high street banking.

Osborne's claim that not a single bank would pay this tax is plain wrong. The bit he did get right is that banks as intermediaries would not pay the tax, but the parties initiating the trades would. So who are initiating the trades? Er, it's the banks. And other financial institutions such as hedge funds who represent high net worth individuals and the richest segments of society. It's why the IMF has said an FTT would in all likelihood be "highly progressive": being paid by those most able to afford it.

More surprising than Osborne's offensive has been Vince Cable's amazing transformation. Cable himself has on a number of occasions supported the Robin Hood Tax, it's even in the Liberal Democrat manifesto. Until Wednesday that is, when he described it as a "tax on Britain", seemingly conflating the financial sector with the UK as a whole.

Worse still, Cable resorted to citing the infamous Swedish FTT from the 1980s. Focusing on this example, unique in its bad design, whilst omitting to mention the Stamp Duty on UK shares which successfully raises the Exchequer more than £3 billion a year, is disingenuous at best. It's a bit like showing us a picture of a square-wheeled bike as evidence that all bicycles are flawed, having just arrived by bike. The key to the Stamp Duty's success is the way it is levied; wherever in the world a UK share is traded - London, New York or the Cayman Islands - the tax still has to be paid.

Osborne and Cable were right about one thing however; no one wants all this money to disappear into the European coffers. A Robin Hood Tax has received such massive support -- from the UK public (who back it by two to one), the Archbishop of Canterbury, the Vatican and millions around the world -- not just because it would curtail casino capitalism but also because it would help tackle poverty and climate change at home and abroad.

Thankfully, the threat of co-option into a "Brussels tax" is overblown. As the Germans recently pointed out, each country would collect the tax nationally. Our campaign wants to see half the money spent helping poor countries and half (that's billions of pounds) spent protecting schools and hospitals, teachers and nurses at home. So, far from the size of the UK's financial sector meaning we have the most to lose from an FTT, we have the most to gain.

By ignoring the positives and exaggerating the negatives the government is compiling themselves a dodgy dossier of reasons not to back the Robin Hood Tax. In doing so they risk putting themselves at odds with public opinion and international momentum behind ensuring the financial sector pays its fair share.

Simon Chouffot is the Robin Hood Tax campaign's spokesperson

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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Workers' rights after Brexit? It's radio silence from the Tories

Theresa May promised to protect workers after leaving the EU. 

In her speech on Tuesday, Theresa May repeated her promise to “ensure that workers’ rights are fully protected and maintained".  It left me somewhat confused.

Last Friday, my bill to protect workers’ rights after Brexit was due to be debated and voted on in the House of Commons. Instead I sat and watched several Tory MPs speak about radios for more than four hours.

The Prime Minister and her Brexit Secretary, David Davis, have both previously made a clear promise in their speeches at Conservative Party conference to maintain all existing workers’ rights after Britain has left the European Union. Mr Davis even accused those who warned that workers’ rights may be put at risk of “scaremongering". 

My Bill would simply put the Prime Minister’s promise into law. Despite this fact, Conservative MPs showed their true colours and blocked a vote on it through filibustering - speaking for so long that the time runs out.

This included the following vital pieces of information being shared:

David Nuttall is on his second digital radio, because the first one unfortunately broke; Rebecca Pow really likes elephant garlic (whatever that is); Jo Churchill keeps her radio on a high shelf in the kitchen; and Seema Kennedy likes radio so much, she didn’t even own a television for a long time. The bill they were debating wasn’t opposed by Labour, so they could have stopped and called a vote at any point.

This practice isn’t new, but I was genuinely surprised that the Conservatives decided to block this bill.

There is nothing in my bill which would prevent Britain from leaving the EU.  I’ve already said that when the vote to trigger Article 50 comes to Parliament, I will vote for it. There is also nothing in the bill which would soften Brexit by keeping us tied to the EU. While I would personally like to see rights in the workplace expanded and enhanced, I limited the bill to simply maintaining what is currently in place, in order to make it as agreeable as possible.

So how can Theresa May's words be reconciled with the actions of her backbenchers on Friday? Well, just like when Lionel Hutz explains to Marge in the Simpsons that "there's the truth, and the truth", there are varying degrees to which the government can "protect workers' rights".

Brexit poses three immediate risks:

First, if the government were to repeal the European Communities Act without replacing it, all rights introduced to the UK through that piece of legislation would fall away, including parental leave, the working time directive, and equal rights for part-time and agency workers. The government’s Great Repeal Bill will prevent this from happening, so in that sense they will be "protecting workers’ rights".

However, the House of Commons Library has said that the Great Repeal Bill will leave those rights in secondary legislation, rather than primary legislation. While Britain is a member of the EU, there is only ever scope to enhance and extend rights over and above what had been agreed at a European level. After Brexit, without the floor of minimum rights currently provided by the EU, any future government could easily chip away at these protections, without even the need for a vote in Parliament, through what’s called a "statutory instrument". It will leave workers’ rights hanging by a thread.

The final change that could occur after we have left the EU is European Court rulings no longer applying in this country. There are a huge number of rulings which have furthered rights and increased wages for British workers - from care workers who do sleep-in shifts being paid for the full shift, not just the hours they’re awake; to mobile workers being granted the right to be paid for their travel time. These rulings may no longer have legal basis in Britain after we’ve left. 

My bill would have protected rights against all three of these risks. The government have thus far only said how they will protect against the first.

We know that May opposed the introduction of many of these rights as a backbencher and shadow minister; and that several of her Cabinet ministers have spoken about their desire to reduce employment protections, one even calling for them to be halved last year. The government has even announced it is looking at removing the right to strike from transport workers, which would contradict their May’s promise to protect workers’ rights before we’ve even left the EU.

The reality is that the Conservatives have spent the last six years reducing people’s rights at work - from introducing employment tribunal fees which are a barrier to justice for many, to their attack on workers’ ability to organise in the Trade Union Act. A few lines in May’s speech doesn’t undo the scepticism working people have about the Tories' intentions in this area. Until she puts her money where her mouth is, nor should they. 

Melanie Onn is the Labour MP for Great Grimsby.