A financial transactions tax just makes good business sense for Britain

Rather than refusing it to rebuild our casino banks, we should create something new and better.

According to Albert Einstein the definition of insanity is “doing the same thing over and over again and expecting different results”. Yet bolstered by today’s improving GDP figures, David Cameron’s government appears set on rebuilding the UK economy around the casino capitalists of the City of London. The financial crisis may have derailed the economy to the extent that as a country we’re still poorer than we were six years ago but let’s just put the old show back on the road again.

This attitude was exemplified by Boris Johnson’s speech to the British Bankers’ Association this week when he invited European banks to come to the UK to avoid the proposed European financial transactions tax (FTT, also knows as a Robin Hood Tax). Nevermind the fact that moving to London would not actually help them evade the tax, the message was clear: the UK wants the same as the financial sector, a return to business (and bonuses) as usual.

Thankfully, MPs on the Business, Innovations and Skills Committee today intruded into the debate calling into question the Government’s position. In their response to the Kay review of UK equity markets and long-term decision making, MPs not only called for the Government to get on with implementing the professor’s recommendations – including a review of merger and acquisition activity – but also called on Cameron and Osborne to think again about their opposition to the FTT.

Their argument does not rest on the moral imperative that the financial sector should repay the damage it has done – something even the Prime Minister and Chancellor are wary of disputing. Instead the Committee makes hard-headed economic arguments for an FTT - that it would curb damaging high frequency trading, the computer-driven casino capitalism that causes flash crashes. It is an argument I have made here previously.

The business case for an FTT is so strong that Vince Cable told MPs that “I am, in some ways, quite disposed to it”. But given the political capital George Osborne and David Cameron have invested in opposing the plans of 11 European countries to press ahead with an FTT, it is difficult to see this Government changing course.

That provides a real opportunity for Labour. Ed Miliband’s themes of "responsible capitalism" and "one nation" could have been adopted with the Robin Hood Tax in mind. What better way of cracking down on the "wild-west" excesses of the market that he condemned in his conference speech two years ago than by levying a tiny tax that will have negligible impact on long-term investment but make financial gambling via high-frequency trading unprofitable?

And what better way of showing that Labour is truly a "one nation party" than by making the Square Mile pay for the damage it has done to the whole of the British economy and at the same time make it less likely that it will be able to wreak such damage in future?

It is hard-headed economic arguments like these which have led the German finance ministry to champion the tax within Europe. And with 11 European countries – including the major economies of France, Germany, Italy and Spain – set to introduce a wide ranging FTT on shares, bonds and derivatives early in 2014, a future Labour government would hardly be leaping into the dark if they followed suit.

Miliband and his Shadow Chancellor Ed Balls have spoken warmly about the Robin Hood Tax and its potential to raise billions to tackle poverty at home and abroad. But like the Government, they have pretended that such a tax must be global (or at least have the support of the US) to work. Given the UK’s own FTT – the 0.5 per cent stamp duty on shares – raises about £3bn annually this is palpable nonsense. It is to be hoped that today’s dose of economic good sense from MPs will encourage them to be a bit bolder.

Not quite a casino bank… Photograph: Getty Images

Jon Slater is a Senior Press Officer for Oxfam and a spokesperson for the Robin Hood Campaign

Shaun Botterill/Getty Images
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All the Premiership teams are competing to see who’s got the biggest stadium

It’s not just a financial, but a macho thing – the big clubs want to show off that they have a whopper.

Here in NW5, where we live noisily and fashionably, we are roughly equidistant from Arsenal and Spurs. We bought the house in 1963 for £5,000, which I mention constantly, to make everyone in the street pig sick. Back in 1963, we lived quietly and unfashionably; in fact, we could easily have been living in Loughton, Essex. Now it’s all changed. As have White Hart Lane and Highbury.

Both grounds are a few metres further away from us than they once were, or they will be when White Hart Lane is finished. The new stadium is a few metres to the north, while the Emirates is a few metres to the east.

Why am I saying metres? Like all football fans, I say a near-miss on goal was inches wide, a slow striker is a yard off his pace, and a ball player can turn on a sixpence. That’s more like it.

White Hart Lane, when finished, will hold 61,000 – a thousand more than the Emirates, har har. Meanwhile, Man City is still expanding, and will also hold about 60,000 by the time Pep Guardiola is into his stride. Chelsea will be next, when they get themselves sorted. So will Liverpool.

Man United’s Old Trafford can now hold over 75,000. Fair makes you proud to be alive at this time and enjoying the wonders of the Prem.

Then, of course, we have the New Wembley, architecturally wonderful, striking and stunning, a beacon of beauty for miles around. As they all are, these brave new stadiums. (No one says “stadia” in real life.)

The old stadiums, built between the wars, many of them by the Scottish architect Archibald Leitch (1865-1939), were also seen as wonders of the time, and all of them held far more than their modern counterparts. The record crowd at White Hart Lane was in 1938, when 75,038 came to see Spurs play Sunderland. Arsenal’s record at Highbury was also against Sunderland – in 1935, with 73,295. Wembley, which today can hold 90,000, had an official figure of 126,000 for the first Cup Final in 1923, but the true figure was at least 150,000, because so many broke in.

Back in 1901, when the Cup Final was held at Crystal Palace between Spurs and Sheffield United, there was a crowd of 110,820. Looking at old photos of the Crystal Palace finals, a lot of the ground seems to have been a grassy mound. Hard to believe fans could see.

Between the wars, thanks to Leitch, big clubs did have proper covered stands. Most fans stood on huge open concrete terraces, which remained till the 1990s. There were metal barriers, which were supposed to hold back sudden surges, but rarely did, so if you were caught in a surge, you were swept away or you fell over. Kids were hoisted over the adults’ heads and plonked at the front.

Getting refreshments was almost impossible, unless you caught the eye of a peanut seller who’d lob you a paper bag of Percy Dalton’s. Getting out for a pee was just as hard. You often came home with the back of your trousers soaked.

I used to be an expert on crowds as a lad. Rubbish on identifying a Spitfire from a Hurricane, but shit hot on match gates at Hampden Park and Ibrox. Answer: well over 100,000. Today’s new stadiums will never hold as many, but will cost trillions more. The money is coming from the £8bn that the Prem is getting from TV for three years.

You’d imagine that, with all this money flooding in, the clubs would be kinder to their fans, but no, they’re lashing out, and not just on new stadiums, but players and wages, directors and agents. Hence, so they say, they are having to put up ticket prices, causing protest campaigns at Arsenal and Liverpool. Arsène at Arsenal has admitted that he couldn’t afford to buy while the Emirates was being built. Pochettino is saying much the same at Spurs.

It’s not just a financial, but a macho thing – the big clubs want to show off that they have a whopper. In the end, only rich fans will be able to attend these supergrounds. Chelsea plans to have a private swimming pool under each new box, plus a wine cellar. Just like our street, really . . . 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle